Oil failed to extend yesterday’s gains as rising crude stockpiles in the U.S. countered signs of an improving economic outlook in the world’s biggest consumer. Futures rallied 1.3 percent yesterday, the most in two weeks, after Commerce Department data showed December purchases of new homes climbed more than economists estimated. A report today will probably say durable-goods orders also rose, according to a Bloomberg News survey. Crude supplies climbed four times more than forecast last week while fuel demand dropped, according to the U.S. Energy Department. “We are at a bit of a plateau now as far as price is concerned,” said Victor Shum, a senior principal at Singapore- based energy consultants Purvin & Gertz Inc. in Singapore. “This is where the market feels the price should be given the balance between the economic optimism and the relatively weak fundamentals.” Oil for March delivery was at $87.11 a barrel in electronic trading on the New York Mercantile Exchange, down 22 cents, or 0.3 percent, at 1:01 p.m. in Singapore. The contract earlier rose as much as 0.4 percent. Yesterday, it climbed $1.14 to $87.33. Futures are up 17 percent in the past year. Brent crude for March settlement on the London-based ICE Futures Europe exchange declined 22 cents, or 0.2 percent, to $97.69 a barrel. Yesterday, the contract rallied 2.8 percent, the most since Dec. 1. Crude Stockpiles U.S. stockpiles increased 4.84 million barrels to 340.6 million in the week ended Jan. 21, according to an Energy Department report yesterday. They were forecast to increase 1.2 million barrels, based on the median estimate of 15 analysts surveyed by Bloomberg News. Total fuel demand decreased 1.6 percent to 18.9 million barrels a day last week, the lowest since November, according to the department. Crude supplies at Cushing, Oklahoma, the main delivery point for New York futures, gained 2.3 percent to the highest since August, the report showed. Stronger than expected economic data in the U.S. has fanned speculation fuel demand may recover in the world’s biggest crude consumer. Sales of new homes climbed to a 329,000 annual pace last month, the Commerce Department said yesterday. A median estimate of 300,000 was predicted by economists in a Bloomberg News survey. The percentage increase was the biggest since 1992. “The new-home sales data came off a pretty low base but it was definitely positive and when you look at the Fed commentary, one of the areas that they singled out as being disappointing was the housing sector,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. Orders for durable goods advanced 1.5 percent last month, after a 0.3 percent decline in November, economists forecast before a report today. Pending home sales, or contract signings for existing homes, added 0.9 percent, after a 3.5 percent gain the prior month, based on the median economist estimate before data scheduled to be released by the National Association of Realtors today. -- With assistance from Chrsitian Schmollinger in Singapore and Ben Sharples in Melbourne Editors: Alexander Kwiatkowski, Clyde Russell To contact the reporter on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net

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