Crude oil fell to a one-month low in New York after equities dropped on President Barack Obama’s proposed restrictions on risk-taking at financial institutions and on speculation China will raise interest rates.

Oil fell as much as 2.3 percent as stocks tumbled on the administration’s plan to bar banks from trading for their own accounts. U.S. refineries ran at 78.4 percent of capacity last week, the lowest rate outside the Atlantic hurricane season since at least 1989, the Energy Department said yesterday.

“A general malaise has crept into all the markets because of uncertainty about the Obama administration’s proposals to regulate the financial industry,” said John Kilduff, a partner at Round Earth Capital, a New York-based hedge fund that focuses on food and energy commodities. “The Chinese news has also been an important factor this week.”

Crude oil for March delivery declined $1.53, or 2 percent, to $74.55 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Futures touched $74.33, the lowest level since Dec. 23. Prices are up 71 percent from a year ago.

March oil has dropped 4.9 percent this week as declines in equity markets dented investor confidence and a stronger dollar reduced the appeal of commodities as an alternate investment.

The Standard & Poor’s 500 Index slipped 1 percent to 1,105.23. The financial sector was down 1.9 percent.

President Obama’s plan will affect commodities trading done by “all the banks,” said Damian Honey, a partner at law firm Holman Fenwick Willan LLP in London.

‘The Worst Case’

“They will either have to sell off proprietary trading or will carve it off into a separate entity,” Honey, who has worked with banks on their commodities business for 13 years said. “The worst case might be divesting themselves of the proprietary trading business.”

The Reuters/Jefferies CRB Index of 19 commodities declined 0.8 percent to 275.43, the lowest since Dec. 22. Gold futures for February delivery slipped $13.50, or 1.2 percent, to settle at $1,089.70 an ounce on the Comex division of the Nymex. It’s the first time gold closed below $1,100 this year.

China’s 10.7 percent growth in the fourth quarter ignited concern that the nations responsible for leading the world out of a recession will raise borrowing costs to keep their economies from overheating. China is the second-biggest energy consumer after the U.S.

“We believe that Chinese oil demand will slow from the current pace, partly due to government policy tightening, but the risk to our 2010 forecast is skewed to the upside,” Goldman Sachs Group Inc. analysts including Jeffrey Currie said in an e- mailed report today.

Fuel Stockpiles

Gasoline inventories climbed 3.95 million barrels to 227.4 million last week, the highest level since March 2008, the Energy Department said. Supplies of gasoline, crude oil and distillate fuel, a category that includes heating oil and diesel, were above the five-year average for the week.

U.S. fuel consumption in the past four weeks dropped 1.8 percent from a year earlier, the report showed.

“There’s room for a further move to the downside,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “Inventory levels are still very, very high for this time of year and demand is weak.”

Brent Discount

Brent crude oil for March settlement slipped $1.80, or 2.4 percent, to $72.78 a barrel on the London-based ICE Futures Europe exchange. Futures touched $72.61, the lowest level since Dec. 22. Brent is trading at a $1.77 a barrel discount to the West Texas Intermediate contract in New York, the most Oct. 30. Higher U.S. prices may attract shipments from the North Sea.

Oil volume in electronic on the Nymex was 522,662 contracts as of 2:37 p.m. in New York. Volume totaled 506,795 contracts yesterday, 10 percent below the average of the past three months. Open interest was 1.33 million contracts. The exchange has a one-business-day delay in reporting open interest and full volume data.