Sept. 3 (Bloomberg) -- Oil traded above $68 a barrel in New York after inventories declined in the U.S., signaling improving fuel consumption in the world’s largest economy. Commercially held crude oil inventories dropped 372,000 barrels to 343.4 million in the week to Aug. 28, according to a U.S. Energy Department report yesterday. Gasoline stockpiles in the nation fell to an 11-week low, the report showed. “U.S. oil demand has reached a turning point, with demand indications now likely to turn increasingly positive over the rest of the year,” analysts at Barclays Capital, led by Paul Horsnell, said in a report. “Gasoline demand patterns seem to have been a reasonably good indicator, almost a leading indicator, as to the timing of the U.S. recession.” Crude oil for October delivery traded at $68.20 a barrel, up 15 cents, on the New York Mercantile Exchange at 12:13 p.m. in Singapore. Yesterday, the contract settled unchanged at $68.05, the first time this has happened since Nov. 24, 2006. Prices have gained 53 percent this year. U.S. daily fuel consumption averaged 19.3 million barrels in the four weeks ended Aug. 28, up 0.1 percent from a year earlier. Gasoline inventories in the U.S. declined 2.97 million barrels from a week earlier to 205.1 million. ‘Positive Data’ “The decline in crude oil inventories was only modest, but we do have a situation where the product supply in the last four-week period was slightly ahead of what it was a year ago,” said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. “There is evidence there that the demand side on the U.S. is stabilizing.” Factories in the U.S. expanded in August for the first time in 19 months, the Institute for Supply Management’s factory gauge showed Sept. 1. China’s Purchasing Managers’ Index rose to a seasonally adjusted 54 from 53.3 in July, the Federation of Logistics and Purchasing said Sept. 1. “Over the past week we have seen some positive data,” Moore said. “There is evidence that China is on a strong growth path and that activity in other developed economies is at least stabilizing.” Brent crude oil for October settlement was at $67.65 a barrel, down 1 cent, on the London-based ICE Futures Europe exchange at 11:47 a.m. Singapore time. Yesterday, the contract declined 7 cents to $67.66, the lowest settlement since July 29. To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Yee Kai Pin in Singapore at

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