Oct. 25 (Bloomberg) -- Crude oil rose to $88 a barrel in New York after a U.S. government report showed that the biggest drop in imports since March caused an unexpected decline in inventories. Brent futures rose to a record in London.

Stockpiles fell 5.3 million barrels last week to their lowest since Jan. 5 as imports plunged 13 percent, the Energy Department said yesterday. A gain of 963,000 barrels was expected, according to a Bloomberg News survey. Gasoline demand, measured by deliveries from refineries, rose for a third week.

``The biggest swing factor was the imports, which were very low for crude and for products,'' said Dariusz Kowalczyk, chief investment strategist with CFC Seymour Ltd. in Hong Kong.

Crude oil for December delivery rose as much as 93 cents, or 1.1 percent, to $88.03 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $87.94 at 2:34 p.m. in Singapore.

The contract yesterday climbed for the first time in four days, gaining $1.83, or 2.2 percent, to $87.10.

``Nobody was picking this big a draw,'' said Mark Waggoner, president of Excel Futures Inc. in Huntington Beach, California.

Brent crude oil for December settlement rose as much as 78 cents, or 0.9 percent, to a record $85.15 a barrel on the London-based ICE Futures Europe exchange. It was at $85.13 at 2:36 p.m. Singapore time.

Stockpiles, Imports

The drop in U.S. crude-oil stockpiles left them at 316.6 million barrels, 5 percent higher than the five-year average for the period, the department said. A week earlier, supplies were 7.8 percent higher than the five-year average.

Daily crude-oil imports plunged by 1.3 million barrels to 9.1 million, the lowest since the week ended March 2. The biggest drop was on the east coast where imports fell 667,000 barrels a day, down 32 percent from a three-year high of 2.08 million barrels a day the week before.

U.S. fuel stockpiles unexpectedly fell last week as imports of gasoline and blending components declined and refiners shut units for maintenance before winter. Refinery operating rates fell to 87.1 percent of capacity, a four-week low.

Gasoline inventories fell 1.93 million barrels to 193.8 million, 3.6 percent less than the five-year average for the period, the report showed. A 475,000 barrel gain was expected, according to the analyst survey.

Stockpiles will need to reach 210 million barrels by the first quarter ``to keep any sort of cap on gasoline prices,'' Barclays Capital Inc. analysts Paul Horsnell and Kevin Norrish said in a note to clients.

Distillate Fuel

Stockpiles of distillate fuel, including heating oil and diesel, slipped 1.85 million barrels to 134.5 million, 3.9 percent more than the five-year average, according to the department. A 250,000 barrel increase was forecast.

``The portfolio of products supplied has been very funny this year,'' said Hirofumi Kawachi, senior energy analyst at Mizuho Investors Securities Ltd. in Tokyo. ``So that has created concern about inventories.''

Oil reached a record $90.07 a barrel in New York on Oct. 19 after the dollar fell against the euro and Turkish lawmakers voted to allow military strikes in Iraq against Kurdish militants. Iraq holds the world's third-largest reserves of oil.

Turkey's military attacked Kurdish fighters in northern Iraq yesterday, as the U.S. urged restraint from both sides in the conflict. Turkish F-16 jets and helicopters strafed positions along the Iraqi border, the state-run Anatolia news agency in Ankara said, in a fourth day of fighting.

The Organization of Petroleum Exporting Countries pledged to pump an extra 500,000 barrels of oil a day starting Nov. 1 to help meet peak winter demand. The group will probably supply 31.4 million barrels a day in October, up from 30.9 million last month, Conrad Gerber, president of Geneva-based PetroLogistics Ltd., said yesterday.

To contact the reporter on this story: Christian Schmollinger in Singapore at Christian.s@bloomberg.net

Last Updated: October 25, 2007 02:44 EDT