By James Paton and Ann Koh Dec. 24 (Bloomberg) -- Oil rose for a third day in New York after a government report showed a larger-than-expected decline in U.S. stockpiles, signaling a recovery in fuel demand in the world’s largest energy user. Futures jumped 3.1 percent yesterday, the biggest gain in more than a month, after the Department of Energy said crude supplies had their largest drop since September. American consumer spending and incomes climbed in November. “The story has been the big drawdown in oil products overnight,” Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, said by phone. “Around $75 is a reasonable mark given the fundamentals.” Crude oil for February delivery climbed as much as 81 cents, or 1.1 percent, to $77.48 a barrel in electronic trading on the New York Mercantile Exchange. It was at $77.26 at 12:12 p.m. Singapore time. Oil has risen 73 percent this year, poised for the biggest annual gain in a decade. The U.S. dollar declined after sales of new American homes unexpectedly fell last month, losing as much as 0.8 percent yesterday to $1.4366 per euro and retreating from the strongest level since September. A weaker dollar increases the appeal of commodities to investors. U.S. consumer purchases rose 0.5 percent as households took advantage of discounts on autos and electronics, figures from the Commerce Department showed yesterday in Washington. China’s Demand Oil may reach $90 in 2010, driven by Chinese demand, Nick Raffan, an analyst at Fat Prophets, said in an interview today in Sydney. “China’s growth rates are startling,” he said. Futures have traded between $68.59 and $82 since Oct. 6. The market will trade near the top of the range at the start of 2010, Brison Bickerton, chief energy strategist at RBS Sempra Commodities in Stamford, Connecticut, said in a Bloomberg Television interview. “We look for a price of $78 to $80 in the first half of the year. We believe that as fundamentals tighten up in the second half of the year, oil can press higher to $85.” U.S. supplies fell 4.84 million barrels to 327.5 million last week, according to the Department of Energy. Inventories were forecast to decrease by 1.6 million barrels, according to a Bloomberg News survey. Stockpiles of gasoline and distillate fuel, a category that includes heating oil and diesel, dropped as demand climbed. Imports Fall Imports of crude to the U.S. fell 0.8 percent to 7.71 million barrels a day, the lowest since September 2008 when ports were shut because of Hurricanes Gustav and Ike. Fuel imports slipped 8 percent to 2.42 million barrels a day, the lowest since October. Inventories of crude oil last week were 5.3 percent higher than the five-year average for the period, the department said. Supplies of gasoline and distillate fuel were also above average. Refineries operated at 80 percent of capacity last week, compared with 79.9 percent a week earlier. Analysts surveyed by Bloomberg News forecast a 0.4 percentage-point gain. Gasoline stockpiles fell 883,000 barrels to 216.3 million, the first decline in five weeks. A 1 million-barrel increase was forecast, according to the median of 16 analyst responses in the Bloomberg News survey. Distillate supplies tumbled 3.03 million barrels to 161.3 million, the biggest drop since April. Analysts forecast a 2 million-barrel decline. Traders expect reduced volumes during the final two weeks of the year as investors take holidays. There will be no trading tomorrow for Christmas and on Jan. 1 for New Year’s Day. Brent crude oil for February settlement rose as much as 92 cents, or 1.2 percent, to $76.37 a barrel on the London-based ICE Futures Europe exchange, and was at $76.16 at 12:15 p.m. Singapore time. Yesterday, it rose $1.99, or 2.7 percent, to end the session at $75.45 a barrel, the highest close since Dec. 7. To contact the reporters on this story: James Paton in Sydney at jpaton4@bloomberg.net; Ann Koh in Singapore at akoh15@bloomberg.net

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