By Mark Shenk Dec. 2 (Bloomberg) -- Crude oil and gasoline declined after a government report showed that inventories climbed last week as consumption declined. Supplies of crude oil rose 2.09 million barrels to 339.9 million last week, the highest level since August, the Energy Department said today. Gasoline supplies surged 4 million barrels to 214.1 million. Fuel demand slipped 2.6 percent last week as refineries reduced operating rates for the fourth time in five weeks. “There’s going to be a lot of negativity any time you get big crude and gasoline numbers like we did today,” said Nicholas Pope, an analyst at Dahlman Rose & Co. in New York. Crude oil for January delivery fell $1.56, or 2 percent, to $76.81 a barrel at 11:01 a.m. on the New York Mercantile Exchange. Oil traded at $77.70 before the release of the report at 10:30 a.m. in Washington. Gasoline for January delivery declined 5.13 cents, or 2.5 percent, to $1.991 a gallon in New York. Heating oil for January delivery slipped 3.49 cents, or 1.7 percent, to $2.0431 a gallon. Stockpiles of crude oil were forecast to decline by 400,000 barrels, according to the median of 15 analyst estimates in a Bloomberg News survey. Gasoline supplies were estimated to increase 700,000 barrels. Total U.S. daily fuel demand averaged 18.5 million barrels in the four weeks ended Nov. 27, down 3.2 percent from a year earlier, the report showed. Russian Production Oil also dropped after a report showed that oil output in Russia, the world’s largest oil producer, remained at a post- Soviet high for a second month in November as OAO Rosneft continued to ramp up the Vankor field in northern Siberia. Production was unchanged from October at 41.22 million metric tons, or 10.07 million barrels a day, the Energy Ministry’s CDU-TEK unit said in an e-mailed statement today. Output rose 2.9 percent from a year earlier. Rosneft said last week it plans to raise output at Vankor by as much as 50 percent to an average of 270,000 barrels a day next year. It anticipates peak production of more than 500,000 barrels a day from the field. Five British yachtsmen detained by Iran’s navy in the Persian Gulf last week were released today, state-run media reported. Iran’s Revolutionary Guards Corps said questioning of the sailors made it clear they had entered Iranian waters by mistake, the Fars news agency reported. The Persian Gulf nation has the world’s second-biggest proved oil reserves. Almost a quarter of the world’s oil flows through the Strait of Hormuz, a narrow waterway between Iran and Oman at the mouth of the Persian Gulf. Brent crude oil for January settlement fell 71 cents, or 0.9 percent, to $78.64 a barrel on the London-based ICE Futures Europe exchange. To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.

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