By Rachel Graham Nov. 12 (Bloomberg) -- Oil declined before a government report today expected to show U.S. crude stockpiles increased last week. Inventories of crude oil rose 1 million barrels in the week ended Nov. 6 from 335.9 million the prior week, according to a Bloomberg survey of 15 analysts. Last week’s report from the Department of Energy showed an unexpected drop in oil stocks. “We’ll be looking to see if last week’s figure was a blip,” said Kaha Kiknavelidze, a managing partner at London- based Rioni Capital Partners LLP, a hedge fund that specializes in emerging markets. Crude for December delivery fell as much as 48 cents, or 0.6 percent, at $78.80 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $78.87 a barrel at 11:19 a.m. London time. The contract closed up 0.3 percent at $79.28 a barrel yesterday. Oil has gained 77 percent this year. U.S. crude inventories are about 7 percent above the same level last year after the recession curbed energy demand. The Department of Energy report last week showed stockpiles fell 3.94 million barrels, pushing crude oil prices to more than $80 a barrel. An increase of 1.5 million barrels had been forecast in a Bloomberg survey that week. “Inventories will help clarify the picture,” Paul Harris, head of natural resources risk management at the Bank of Ireland, said from Dublin. “In the absence of fresh factors the market is likely to remain moribund.” New York crude has risen 1 percent this month. Brent Crude Brent crude for December settlement dropped 29 cents, or 0.4 percent, to $77.66 a barrel on the London-based ICE Futures Europe exchange. The International Energy Agency increased its forecast for 2010 global oil demand as the pace of economic recovery in Asia and the Middle East picks up. Global oil consumption is likely to average 86.2 million barrels a day next year, 140,000 barrels more than previously estimated, the IEA said in its monthly report. “Surging demand in China and Saudi Arabia, as well as somewhat higher than anticipated data for the U.S.” led to the increase in estimates, the Paris-based agency said. The U.S. Energy Department is scheduled to release its weekly report at 11 a.m. in Washington, a day later than usual because of the Veterans’ Day holiday yesterday. To contact the reporter on this story: Rachel Graham in London rgraham13@bloomberg.net

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