By Ann Koh Dec. 30 (Bloomberg) -- Crude oil rose for a sixth day before a U.S. government report that is forecast to show a decline in stockpiles of the fuel in the largest energy- consuming nation. Oil supplies likely fell by 1.85 million barrels last week, according to analysts surveyed by Bloomberg News. The Energy Department is due to release its inventory report today at 10:30 a.m. in Washington. U.S. consumer confidence improved in December for a second month, a report yesterday showed, pointing to an economy that will keep expanding into 2010. The dollar “Inventories will be building in January, but this week I’m not sure yet,” said Clarence Chu, a trader with options dealer Hudson Capital Energy in Singapore. “Partly also, from this morning the dollar has come off. The dollar is still higher on the day but it has pulled back a little bit.” Crude oil for February delivery rose as much as 32 cents, or 0.4 percent, to $79.19 a barrel on the New York Mercantile Exchange. It was at $79.02 at 4:17 p.m. Singapore time. Yesterday, oil rose 10 cents to $78.87, the highest settlement since Nov. 18. Oil has climbed 8.8 percent in the past five days and surged 77 percent this year on signs of a global economic recovery. Futures have tripled in the past decade. “After strong gains over the past year, there’s a propensity to lock in profits and reposition for 2010,” said Mark Pervan, a senior commodity strategist at ANZ Banking Group Ltd. in Melbourne. “Now, I think you’re going to see sideways movement.” Dollar Gains A stronger dollar is limiting gains in oil prices by reducing the appeal of commodities as an investment. The dollar may rise against the euro for a third day before a report economists said will show U.S. manufacturing expanded in December for a fifth month, adding to signs the economy is gaining momentum. The dollar bought 92.02 yen at 2:31 p.m. Singapore time, from 92 in New York yesterday, after touching 92.26, the highest level since Oct. 27. A “major Arctic wave” heading for the U.S. will likely cause millions of households to boost heating fuel use this winter, according to State College, Pennsylvania-based AccuWeather.com. Heating oil for January delivery rose as much as 0.95 cent, or 0.5 percent, to $2.1123 a barrel on the Nymex. Consumer Confidence The Conference Board’s confidence index increased to 52.9, in line with the median forecast of economists surveyed by Bloomberg News, from 50.6 in November, the New York-based research group said yesterday. Another report showed home prices climbed in October for a fifth consecutive month. U.S. inventories of crude oil probably declined from from 327.5 million the prior week, according to the Bloomberg survey of 14 analysts before the Energy Department’s report. Gasoline supplies are forecast to climb by 1 million barrels, and distillates, a category that includes heating oil and diesel, to fall by 2.23 million. The American Petroleum Institute said yesterday inventories of crude oil rose 1.73 million barrels last week to 330.5 million. Refinery utilization rates fell to 78.2 percent in the week ended Dec. 25 from 78.4 percent a week earlier, according to the industry-funded API. “It seems the demand outlook is the very big swing variable in the oil market at the moment,” said Ben Westmore, a minerals and energy economist at National Australia Bank, in a Bloomberg Television interview. “If you couple that with the fact that you have a large supply overhang, it’s difficult to see the oil price moving higher in a trend sense.” Brent crude for February settlement rose as much as 40 cents, or 0.5 percent, to $78.04 a barrel on London’s ICE Futures Europe exchange. It was at $77.83 at 4:17 p.m. Singapore time. Yesterday, prices increased 32 cents, or 0.4 percent, to $77.64 a barrel. To contact the reporters on this story: Ann Koh in Singapore at akoh15@bloomberg.net; James Paton in Sydney jpaton4@bloomberg.net.

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