Dec. 27 (Bloomberg) -- Crude oil traded near a one-month high in New York on speculation U.S. inventories declined for a fifth week and after Turkish planes bombed suspected Kurdish bases in northern Iraq.

The Energy Department may today report a fifth weekly decline in supplies, according to the median estimate of 10 analysts surveyed by Bloomberg News. Turkey's attacks on northern Iraq raised concern oil exports by pipeline from the area may be disrupted.

``A further drawdown in stockpiles will reinforce the perception that the market is tight,'' said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney. ``The immediacy of the tensions in Iraq has brought back the risk premium and will remain for some time.''

Crude oil for February delivery traded at $95.95 a barrel, down 2 cents, at 12:32 p.m. Singapore time in electronic trading on the New York Mercantile Exchange. Yesterday, the contract rose $1.84, or 2 percent, to settle at $95.97 a barrel, the highest close since Nov. 26. Futures touched a record $99.29 on Nov. 21 and are up 55 percent from a year ago.

The Energy Department is scheduled to release its weekly report on inventories at 10:30 a.m. in Washington, a day later than usual because of the Christmas holiday. Supplies dropped 1.63 million barrels in the week ended Dec. 21, according to the median estimate by analysts. Imports may have been hampered by delays because of fog Dec. 19 at the Houston Ship Channel, which serves the largest U.S. petroleum port.

``People are talking about the decline in the crude inventory because of the bad weather at the Houston Ship Channel,'' said Hirofumi Kawachi, senior energy analyst at Mizhuo Investors Securities Ltd. in Tokyo. ``Everyone is much more focused on the geopolitical risks to the market rather than the state of the world economy.''

`Thin, Volatile'

Trading volumes have been lower than usual because of end- of-year holidays. Nymex oil traders exchanged 81,634 contracts on Dec. 24, down 82 percent from a week earlier, according to data compiled by Bloomberg.

``The main thing today is that this is a thin, volatile market,'' said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. ``If someone wants to push this market, they clearly can.''

Brent crude for February settlement traded at $93.95 a barrel, up 1 cent, at 12:30 p.m. Singapore time on London's ICE Futures Europe exchange. Yesterday, it gained $1.24, or 1.3 percent, to settle at $93.94 a barrel, the highest close since Dec. 12.

Turkish Strikes

The Turkish strikes were the latest in a series of cross- border attacks on the outlawed Kurdistan Workers Party, or PKK. Turkish jets yesterday bombed eight sites in northern Iraq, where Kurdish rebels are suspected of setting up camp, the military said in a statement on its Web site. The strikes targeted mountain caves and other shelters in the Zap region.

Iraq has the world's third-largest crude-oil reserves. The country's northern region is controlled by a semi-autonomous Kurdish administration. Kirkuk, at the center of the region's biggest oil field, is about 100 miles (161 kilometers) from the Turkish border.

Exports from northern Iraq's oil fields are carried by pipeline to Turkey's Ceyhan terminal on the Mediterranean Sea.

Dollar Declines

The dollar's decline against the euro also boosted oil prices as it bolstered the appeal of commodities as a hedge against inflation.

The dollar traded near a two-week low versus the euro on speculation slowing retail sales and falling house prices will sustain bets on further Federal Reserve interest-rate cuts next quarter.

Weak Christmas retail sales in the U.S. indicate consumers are starting to feel pressured by the slowdown in the housing market. The U.S. uses about 25 percent of the world's oil.

The U.S. dollar has declined against 14 of the 16 most- active currencies since Sept. 18, when the Fed started lowering borrowing costs. A report today is forecast to show U.S. consumer confidence weakened in December and figures due tomorrow may show new home sales slowed in November.

The dollar traded at $1.4472 per euro at 9:27 a.m. in Singapore, from $1.4489 yesterday, when it reached $1.4505, the lowest since Dec. 14.

To contact the reporter on this story: Nesa Subrahmaniyan in Singapore at nesas@bloomberg.net.

Last Updated: December 27, 2007 00:36 EST