Oil rose to trade near the highest in 27 months on speculation the U.S. will sustain an economic recovery into this year, bolstering consumption in the world’s largest crude user. Futures increased for a second day before a report forecast to show factories in the U.S. continued to lead an expansion beginning in June 2009. A measure of fuel demand in the country climbed to 20.7 million barrels a day, the highest since May 2008, the Energy Department said last week. “We’re looking at December to average over 20 million barrels a day, which is the first time since February 2008,” said Xin Yi Chen, a Singapore-based commodities analyst at Barclays Capital. “So we’re not too concerned about the dips in the market.” Crude for February delivery climbed as much as 47 cents, or 0.5 percent, to $91.85 a barrel in electronic trading on the New York Mercantile Exchange. It was at $91.69 at 3:35 p.m. Singapore time. On Dec. 31, the contract reached $92.06, the highest since Oct. 7, 2008, capping a fourth monthly rise. The Institute for Supply Management’s index of U.S. factories rose to 57 in December, the highest in seven months, according to the median estimate of 57 economists surveyed by Bloomberg News before the Tempe, Arizona-based group’s report. In China, the world’s biggest energy user, a purchasing managers’ index declined to 53.9 from 55.2 in November, the logistics federation and statistics bureau said Jan. 1. Raw Materials Oil advanced 15 percent last year, building on a 78 percent rally in 2009, as signs the global economic recovery is gaining momentum stoked demand for raw materials. Commodities beat increases in equities, bonds and the dollar as China led a recovery from the deepest recession since World War II. Crude may fall this week, a Bloomberg News survey showed. Eighteen of 31 analysts and traders, or 58 percent, forecast prices will decline through Jan. 7. Ten respondents, or 32 percent, predicted futures will rise and three estimated there will be little change. U.S. oil stockpiles decreased for four weeks in December, the longest drop in a year, according to the Energy Department. Supplies, at 339.4 million barrels, were 7.2 percent above the five-year average. Brent crude for February settlement rose as much as 38 cents, or 0.4 percent, to $95.13 a barrel on the London-based ICE Futures Europe exchange. On Dec. 31, the contract climbed to $94.75, the highest settlement since Oct. 1, 2008. To contact the reporters on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net

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