Crude Oil Trades Near $97 After Rising on Lower U.S. Stockpiles

Crude oil was little changed near $97 a barrel after rising yesterday as an Energy Department report showed that U.S. inventories fell more than expected.

Oil is set for a third week of gains after stockpiles declined to the lowest since January 2005. Supplies of distillate fuel, including heating oil, dropped the most since February. The killing of Benazir Bhutto, Pakistan's former prime minister, has heightened concern of further violence in the nuclear-armed nation.

``There is some bias to the upside given the much-larger- than-anticipated drawdown, not just in crude but also in distillates,'' said David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney. The assassination ``is another source of instability that may well affect the region.''

Crude oil for February delivery was at $96.91 a barrel, up 29 cents, on the New York Mercantile Exchange in electronic trading at 10:54 a.m. Singapore time. Futures touched a record $99.29 on Nov. 21. Prices are up 60 percent from a year ago.

Brent crude for February settlement was at $95.11 a barrel, up 33 cents, on London's ICE Futures Europe exchange at 10:39 a.m. Singapore time. The contract yesterday rose 84 cents, or 0.9 percent, to $94.78, the highest close since Nov. 26.

The department released its weekly report on inventories at 10:30 a.m. yesterday in Washington, a day later than usual because of Christmas.

Lower Volumes

Trading volumes have been below average because of end-of- year holidays. Nymex oil traders exchanged an estimated 241,452 contracts yesterday, down 31 percent from a week earlier, according to data compiled by Bloomberg.

Supplies of distillate fuel, a category that includes heating oil and diesel, fell 2.77 million barrels to 126.6 million barrels, the Energy Department report showed. A 900,000 barrel decline was expected, according to the median of responses.

Heating oil for January delivery rose 3.91 cents, or 1.5 percent, to close at $2.6803 a gallon in New York yesterday. It was the highest settlement price since Nov. 26.

Gasoline supplies rose 636,000 barrels to 205.9 million last week, the report showed. A 1.4 million barrel gain was expected.

The January contract for reformulated gasoline to be blended with ethanol before delivery, known as RBOB, rose 4.36 cents, or 1.8 percent, to $2.4962 a gallon in New York, a record close.

Total implied fuel demand in the U.S. averaged 21.1 million barrels a day in the four weeks ended Dec. 21, up 1.6 percent from a year earlier, according to the department. Consumption of distillate fuel, a category that includes heating oil and diesel, averaged 4.5 million barrels a day over the period, up 5.7 percent from a year earlier.