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Crude Oil Advances in New York on Shrinking Stockpiles, Iranian Risks

Oil rose in New York on signs that the U.S. economic recovery is reducing the nation’s crude inventories, and on concern that tensions with Iran may lead to disruptions in exports from the Middle East.

Futures advanced as much as 1.4 percent after the American Petroleum Institute said crude inventories slid the most in six weeks in the seven days ended Jan. 13. Energy Department data today may show supplies climbed for a fourth week, according to a Bloomberg News survey of analysts before the API numbers were released. Iran’s ambassador to the United Nations said yesterday that closing the Strait of Hormuz, the passageway for about a fifth of the world’s oil trade, is an option if his country’s security is endangered.

“It was a big draw” in crude inventories reported by the API, said Hannes Loacker, an analyst at Raiffeisen AG in Vienna. “So expectations for the Energy Department numbers definitely become more bullish. On the hand, this may bring disappointment if the crude numbers do not drop.

Crude for February delivery gained as much as $1.42 to $102.01 a barrel in electronic trading on the New York Mercantile Exchange and was at $101.74 at 1:03 p.m. London time. The contract, which expires tomorrow, is up 2.9 percent this year. The more active March contract rose $1.16 to $101.92.

Brent oil for March settlement advanced 84 cents, or 0.8 percent, to $111.50 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate futures was at $9.58, compared with $9.90 yesterday and a record $27.88 on Oct. 14.

Oil Supplies

‘‘There is no decision to block and close the Strait of Hormuz unless Iran is threatened seriously and somebody wants to tighten the noose,’’ Ambassador Mohammad Khazaee said on the Charlie Rose show, according to a transcript of the interview. ‘‘All the options are, or would be, on the table.’’

U.S. crude inventories dropped 4.81 million barrels last week, the most since the week ended Dec. 2, figures from the industry-funded API showed. They are forecast to climb 3 million barrels in the energy department report, according to the median of 12 analyst estimates in the Bloomberg News survey.

Gasoline supplies rose 4.31 million barrels, the API data showed. They are projected to increase 2.35 million barrels in the government report, according to the survey. Distillate inventories, a category that includes diesel and heating oil, fell 900,000 barrels compared with an estimate for a 1.38 million barrel gain.

Gasoline Purchases

The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey. The Energy Department is scheduled to release its inventory report at 11 a.m. in Washington, a day later than usual because of the Martin Luther King Jr. holiday on Jan. 16.

U.S. drivers bought 8.37 million barrels a day of gasoline in the week ended Jan. 13, up from 8.044 million a week earlier that was the lowest level in more than seven years, according to MasterCard’s SpendingPulse report yesterday. The company’s data goes back to July 2004.

Oil in New York may rise to an eight-month high above $103.74 a barrel after failing to settle beneath a support level at the 50-day moving average, according to technical analysis by IAF Advisors.

‘‘There are signs we are bottoming,” said Phil Flynn, vice president of research at PFGBest in Chicago, in an e-mail. “Gas demand bounced a bit,” he said, citing the MasterCard report. “Still, don’t look for a demand surge. It’s very modest.”

Prices slipped yesterday after President Barack Obama denied a permit for TransCanada Corp.’s Keystone XL pipeline that may have reduced inventories by carrying crude from Alberta’s oil sands to refineries along the U.S. Gulf Coast.

The company said it will refile a revised route to avoid an environmentally sensitive area in Nebraska. The 1,661-mile (2,673-kilometer) project planned to transport 700,000 barrels of crude a day and cross six U.S. states.

To contact the reporters on this story: Grant Smith in London at gsmith52@bloomberg.net; Ben Sharples in Melbourne at bsharples@bloomberg.net

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

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