Oil traded near the highest in two weeks on speculation that economic growth in the U.S. will accelerate next year, bolstering demand in the world’s biggest crude-consuming country. Futures rose as much as 0.5 percent earlier today amid optimism that economic data tomorrow will show U.S. gross domestic product expanded at a faster pace than economists’ estimates. Oil stockpiles decreased for a third week, according to a Bloomberg News survey of analysts before an Energy Department report tomorrow. “The economic situation can support the upside further although liquidation of long positions may be possible with no change in fundamentals,” said Ken Hasegawa, a Tokyo-based commodity derivative sales manager at Newedge, a brokerage. “I don’t think we can see much direction during the week, which means continuing range-bound trade between $87 and $90.” Crude for February delivery was at $89.40 a barrel, up 3 cents, at 12:59 p.m. Singapore time. It rose as much as 40 cents to $89.77 a barrel earlier today in electronic trading on the New York Mercantile Exchange. Yesterday, the January contract expired after gaining 0.9 percent to $88.81. Futures reached $90.76 on Dec. 7, the highest since October 2008. U.S. GDP grew 2.8 percent in the third quarter, up from an estimate of 2.5 percent last month, based on the median forecast of 69 economists surveyed by Bloomberg News before a Commerce Department report. Crude Supplies Oil, which rallied 78 percent in 2009, has advanced 13 percent this year on signs of a global economic recovery and as stockpiles decreased. U.S. crude inventories probably fell last week as refiners on the Gulf Coast reduced their assets for tax savings at the end of the year, a Bloomberg News survey showed. Stockpiles dropped 3.5 million barrels in the seven days ended Dec. 17 from 346 million a week earlier, based on the median estimate of seven analysts before tomorrow’s report. Supplies in the previous week slumped 9.85 million, the most since May 2008, as imports fell. Gasoline inventories may have increased by a median 1.5 million barrels from 214.8 million, the survey showed. Distillate fuel stockpiles, including heating oil and diesel, were probably unchanged last week at 161.3 million. Brent crude for February settlement rose as much as 30 cents, or 0.3 percent, to $93.04 a barrel on the London-based ICE Futures Europe exchange. Yesterday, it gained 1.2 percent to $92.74, the highest settlement since Oct. 1, 2008. Catalytic Cracker Gasoline extended gains after climbing to a seven-month high yesterday as Hovensa LLC worked to repair a fuel-making unit that serves the U.S. East Coast, closed since Dec. 9. The fluid catalytic cracker at the St. Croix refinery, the largest in the Caribbean, has a capacity of 150,000 barrels a day. It supplies motor fuel and blending components to markets including New York Harbor, the delivery point for the Nymex gasoline futures. Gasoline for January delivery climbed as much as 0.3 percent to $2.3856 a gallon. Yesterday, it rose 6 cents, or 2.6 percent, to $2.3778, the highest settlement since May 3. “Now that gasoline prices have broken to the upside, we have to expect heating oil and crude oil prices to follow,” Peter Beutel, president of Cameron Hanover Inc., an energy adviser in New Canaan, Connecticut, said in a note. To contact the reporter on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net

Source