Crude oil fell from a one-week high on speculation that cold weather in the U.S. may abate and reduce demand for heating fuel. Oil pared yesterday’s gains after the Energy Department said stockpiles of distillate fuel, a category that includes heating oil and diesel, increased 1.09 million barrels to 161.3 million. Normal or warmer-than-normal weather is likely in most of the Northeast and Midwest from Dec. 25 to Dec. 29, according to Commodity Weather Group in Bethesda, Maryland. “It’s true that we have strong support from cold weather but that will only last as long as the cold lasts,” said Christophe Barret, a London-based oil analyst at Credit Agricole CIB. “The market is not tightening at all.” Crude for January delivery fell as much as 57 cents, or 0.6 percent, to $88.05 a barrel and was at $88.43 on the New York Mercantile Exchange at 9:28 a.m. London time. Brent crude oil for January settlement was at $92.19 a barrel, down 1 cent, on the London-based ICE Futures Europe exchange. The January Brent contract expires today. The more actively traded February contract was at $92.08 a barrel, down 7 cents. Oil increased 34 cents in New York yesterday to $88.62 a barrel, the highest settlement price since Dec. 7, after the Energy Department said crude inventories fell 9.85 million barrels last week to 346 million. Refiners operated at 88 percent of capacity, the most since September. U.S. crude supplies were forecast to drop 2.5 million barrels, a Bloomberg survey showed. The gain was limited as the decline was concentrated on the Gulf Coast. Inventories at Cushing, Oklahoma, the delivery point for New York futures, increased by 982,000 barrels to 35.9 million, the highest level since August. U.S. Weather U.S. crude imports slipped to 7.69 million barrels a day, the report showed. Fuel imports dropped 11 percent to 2.36 million barrels a day. Temperatures during the last week of December may be 5 to 10 degrees Fahrenheit higher than this week, according to AccuWeather Inc. in State College, Pennsylvania. Gasoline supplies rose 809,000 barrels to 214.8 million last week, the Energy Department report showed. They were forecast to climb 2 million barrels, according to the median of 17 responses in the Bloomberg News survey. Stockpiles of distillate fuel, a category that includes heating oil and diesel, increased 1.09 million barrels to 161.3 million. Middle distillate supplies were “a bearish number seasonally speaking,” Stephen Schork, president of consultant Schork Group Inc. in Villanova, Pennsylvania, said in a note to clients. “Last year saw a 2.95 million-barrel draw.” To contact the reporters on this story: Grant Smith in London at gsmith52@bloomberg.net Ann Koh in Singapore at akoh15@bloomberg.net; To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net

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