By Grant Smith Nov. 5 (Bloomberg) -- Crude oil declined, snapping three days of gains, before a report forecast to show that U.S. unemployment rose in October. Oil dropped from a one-week high as concern about financial company earnings sent European stocks lower, with the Dow Jones Stoxx 600 Index losing 0.6 percent. U.S. supplies of middle distillates such as heating oil and diesel were 29 percent above their five-year average after falling less than expected last week, Energy Department data showed. “Fundamentals are dire, and nothing is likely to help too much in the medium term” said Johannes Benigni, chief executive officer of JBC Energy GmbH in Vienna. “It’s very difficult to see a sufficiently cold winter that would bring middle distillate stocks down. I see the market oscillating till the end of the year around $70.” Crude oil for December delivery fell as much as 82 cents, or 1 percent, to $79.58 a barrel on the New York Mercantile Exchange. It was at $79.91 a barrel at 11:02 a.m. London time. Futures have gained 79 percent this year. Yesterday, oil rose to as much as $81.06, the highest price since Oct. 26, after an Energy Department report showed total crude supplies unexpectedly declined. Inventories fell 3.94 million barrels last week, the report said, compared with a 1.5 million-barrel increase forecast by a Bloomberg News survey. While supplies shrank nationwide, crude inventories at Cushing, Oklahoma, where the benchmark grade traded on the Nymex is stored, rose by 30,000 barrels to 25.5 million barrels. Stockpiles of middle distillates are 29 percent above their five-year seasonal norm even after declining 378,000 barrels to 167.4 million barrels, the Energy Department said. A decline of 1 millions barrels was forecast by analysts. Unemployment Data The Labor Department will report tomorrow that the U.S. unemployment rate rose to 9.9 percent in October, from 9.8 percent the previous month, as companies cut another 175,000 jobs, according to the median of forecasts in a Bloomberg News survey of economists. “The Fed is not pointing at any strong demand recovery and U.S. oil statistics are saying the same thing,” said Olivier Jakob, managing director of Zug, Switzerland-based Petromatrix GmbH. “Demand for petroleum product has been very stable for the last five months. While stability is better than continued erosion, it is not yet showing any sign of a rebound.” Brent crude oil for December settlement declined as much as 86 cents, or 1.1 percent, to $78.03 a barrel on the London-based ICE Futures Europe exchange. The contract traded at $78.33 at 11:02 a.m. London time.

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