By Ben Sharples and Yee Kai Pin Jan. 4 (Bloomberg) -- Crude oil rose for an eighth day in New York on optimism fuel demand will increase amid freezing temperatures and improved prospects for an economic recovery in the U.S., the biggest energy consumer. Oil reached $80 a barrel for a second day amid forecasts the worst U.S. employment slump since World War II may have almost ended in December. Cold weather also prompted speculation stockpiles of winter fuels, including heating oil and natural gas, will decline further. “There are further indications that the recovery is progressing,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “It’s also been pretty cold in the U.S. and that’s also been supportive.” Crude oil for February delivery rose as much as 64 cents, or 0.8 percent, to $80 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $79.93 at 11:46 a.m. Singapore time. Heating oil climbed to the highest in 14 months. Crude dropped to a 2009 low of $32.70 a barrel Jan. 20 as the recession reduced demand, and touched a high of $82 on Oct. 21, partly because a weaker dollar bolstered the investment appeal of commodities. Futures climbed 78 percent last year and tripled over the past decade. The Climate Prediction Center, a National Weather Service agency, forecast below-normal temperatures across the eastern half of the U.S. from tomorrow through Jan. 13. The northeast region consumes about four-fifths of the nation’s heating oil. Cold Weather The decline in fuel supplies is “looking good,” said Westmore. “The market is expecting further draw downs. Hopefully we see that this week.” U.S. heating oil stockpiles have fallen for six weeks to 44.4 million barrels, the longest decline since April 2008, Energy Department data showed Dec. 30. Natural gas inventories fell every week in December to 3.276 trillion cubic feet, after rising for eight months. Heating oil for February delivery rose as much as 3.39 cents, or 1.6 percent, to $2.1495 a gallon in New York. It was at $2.1393 at 11:43 a.m. Singapore time. Natural gas futures rose as much as 24.9 cents, or 4.5 percent, to $5.821 per million British thermal units. Prices gained 14.9 percent in December. Payrolls Fell U.S. payrolls probably fell by 1,000 workers last month, the smallest drop since the recession began two years ago, according to the median of 58 economists surveyed by Bloomberg News ahead of a Jan. 8 Labor Department report. A stabilizing labor market may boost consumer spending, the biggest part of the U.S. economy. Manufacturing in China, the second-largest energy consumer, expanded at the fastest rate in 20 months. The Purchasing Managers’ Index climbed to a seasonally adjusted 56.6 in December, the Federation of Logistics and Purchasing said Jan. 1. Crude oil shipments to Europe from Russia were normal as supply talks with Belarus continued beyond a Jan. 1 deadline. Russia, the world’s largest energy exporter, is still talking with its western neighbor, according to Russian energy ministry spokeswoman Irina Yesipova. Russian Deputy Prime Minister Igor Sechin said Dec. 28 Moscow will charge duties from Jan. 1 if there was no agreement by then. The two countries are negotiating a deal under which part of Russia’s oil sales to Belarus would be exempt from export duty. Brent crude oil for February settlement rose as much as 67 cents, or 0.9 percent, to $78.60 a barrel on the London-based ICE Futures Europe exchange. It was at $78.48 at 11:46 a.m. Singapore time. To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Yee Kai Pin in Singapore at kyee13@bloomberg.net

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