Oil rose for the first time in three days

Oil rose for the first time in three days on signs that economic recovery is gaining strength and curb the excess fuel inventories.

Cattle futures after data showed Japan's economy grew faster than initially estimated in the third quarter. A U.S. government report yesterday showed crude inventories in the hands of the world's largest consumer of oil fell by almost three times more than expected. The Organization of Petroleum Exporting Countries will meet to review production quotas at the end of the week.

"The market is anticipating the improved fundamentals in 2011," said Hannes Loacker, analyst at Raiffeisen International Bank AG in Vienna. "But the oil inventory levels remain quite high, above the upper end of the last five years. So in the short term, risk appetite has to step up from an increase to $ 100."

Crude for January delivery rose to $ 1.14, or 1.3 percent, to $ 89.42 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $ 88.71 at 9:38 am London time. Brent crude oil for January settlement rose to 87 cents, or 1 percent, to $ 91.64 a barrel on London's ICE Futures exchange in Europe.

U.S. Crude inventories fell 3.82 million barrels last week to 355.9 million, the Energy Department said. Supplies are expected to decline from 1.4 million, according to the median estimate of 16 analysts surveyed by us.

"A little boost '

"If you look at this issue of oil as part of a trend that is definitely starting to see a decline," said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. "It seems to be something more fundamental and can provide a little boost. In the short to medium term, tax cuts are important for U.S. demand and consumption growth."

500 of Standard & Poor's raised to a maximum of two years in New York yesterday after the extension of President Barack Obama from Bush's tax cuts, was earlier this week. The gross domestic product in Japan grew at an annualized rate of 4.5 percent in the three months ended September 30, faster than the 3.9 percent reported last month, the Cabinet Office said in Tokyo.

Yesterday, oil futures in New York lost 41 cents to $ 88.28. Prices, 78 percent in 2009, have gained 12 percent this year.

U.S. inventories gasoline added 3.81 million barrels to 214 million last week, the biggest percentage increase since November 2009. The stock is forecast to decline 300,000 barrels, based on the survey. Supplies of distillate fuel, including heating oil and diesel, climbed 2.15 million barrels to 160.2 million, ending a 10-week reduction.

"Surge" Run

increase in U.S. inventories products that refiners boosted processing the most since October 2008. Capacity utilization rose 4.9 percentage points to 87.5 percent, the Energy Department report said. That's the highest since the week ended Sept. 17.

The data were "entirely driven by an increase in crude runs," said Michael Wittner, head of New York of the oil market research at Societe Generale SA, in a report yesterday. "The refineries processed more crude oil from week to week, which led to an unexpected draw oil. The product offer increased significantly."

Oil in New York can stop their advance beyond a 26-month high above $ 90 a barrel due to the resistance at the technical charts indicated by Bollinger Bands, according to Cameron Hanover Inc.

Crude oil rose to $ 90.76 a barrel on 7 December, the highest intraday price since October 2008. Investors can start selling when prices of contracts in advance of around $ 90.55, said Peter Beutel, president of the minister of energy in New Canaan, Connecticut. That is the higher of two Bollinger bands.

OPEC quota

OPEC, which pumps about 40 percent of world crude, remain unchanged production targets as oil climbs toward $ 100 a barrel, Shokri Ghanem, chairman of Libya's National Oil Corporation

The 12-member group would probably agree on an extension of quotas and focus on the compliance review of the production when it meets Dec. 11 in Quito, Ecuador, Ghanem said yesterday at Schiphol Airport in Amsterdam. Oil will rise to $ 100 "very soon" and once that happens, the group members can change their production strategy, he said.

Prices "are not reacting to supply and demand," said Qatar's Energy Minister Abdullah bin Hamad al-Attiyah said in an interview in Cancun, Mexico. Oil inventories are at record levels and economic recovery in Europe and the U.S. has been shaken, he said.