Oil traded near a two-week high 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 as traders bet 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. Chinese officials said today the country is poised to raise gasoline prices. “There has been an insatiable appetite from hedge funds and other investors as oil demand picks up,” said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. “But if higher internal fuel prices and monetary tightening slow Chinese growth, and Northern Hemisphere temperatures warm up, the oil market could come off the boil.” Crude for February delivery was at $89.38 a barrel in electronic trading on the New York Mercantile Exchange, up 1 cent, at 11:55 a.m. London time. It rose as high as $89.77, its strongest since Dec. 7. Brent crude for February settlement was at $92.59 a barrel, down 15 cents, on the London-based ICE Futures Europe exchange. 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 before a Commerce Department report at 10:30 a.m. in Washington tomorrow. Chinese Prices China, the world’s largest energy user, will raise the price of gasoline by 310 yuan ($47) a metric ton and diesel by 300 yuan a ton from tomorrow, according to two officials who had been notified of the increase and declined to be identified as they aren’t authorized to speak to the media. 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, the Bloomberg survey showed. Stockpiles dropped 3.5 million barrels in the seven days ended Dec. 17 from 346 million, based on the median estimate of seven analysts before the report. Supplies in the previous week slumped 9.85 million, the most since May 2008, as imports fell. Not Much Direction “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.” 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. “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: Grant Smith in London at gsmith52@bloomberg.net To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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