Crude Rises Near Three-Month High on Europe Sentiment, U.S. Inventories

Oil rose to its highest in more than three months in New York as falling unemployment applications and decreasing crude supplies in the U.S. bolstered confidence that demand will remain supported.

Futures extended gains after the Labor Department said that jobless claims fell by 10,000 to 390,000 in the week ended Nov. 5., the lowest level in seven months. Oil had already gained after Italy met its fund-raising target in a Treasury bills auction. The International Energy Agency reduced forecasts for global oil demand in 2012 for a third month on weaker prospects for developed nations.

“It’s quite bullish at the moment in the oil market,” said Gerrit Zambo, a trader at Bayerische Landesbank in Munich. “But the bullish sentiment can easily turn again if we see markets crashing further due to the Italian situation.”

Crude for December delivery on the New York Mercantile Exchange rose as much as $2.16 to $97.90 a barrel. It was at $97.49 at 1:38 p.m. London time. Yesterday, the contract climbed to a three-month high of $97.84 before falling to settle at $95.74.

Brent oil for December settlement on the London-based ICE Futures Europe exchange rose 85 cents to $113.16 a barrel. The European benchmark’s premium to New York crude narrowed to $15.71.

IEA Report

Global consumption will increase by 1.3 million barrels a day, or 1.5 percent, next year to 90.5 million a day, the Paris- based IEA said today in its monthly market report. The estimate was cut by a “moderate” 20,000 barrels because of lower usage expectations for the U.S. and Japan.

The U.S. trade deficit unexpectedly narrowed in September to the lowest level this year as exports surged to a record high, the Commerce Department said today. The Energy Department reported an unexpected decline in crude inventories yesterday. Stockpiles fell 1.37 million barrels to 338.1 million last week. Supplies were forecast to increase 500,000 barrels, based on the median estimate of 13 analysts polled by Bloomberg News.

Italian bond yields eased after the nation sold 5 billion euros ($6.8 billion) of one-year bills at 6.087 percent, reaching the sale’s target. Yields had climbed above the 7 percent level that drove Greece, Ireland and Portugal to seek bailouts.

To contact the reporter on this story: John Buckley in Amsterdam at johnbuckley@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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