Crude oil traded little changed near a five-week high on speculation OPEC is implementing a 9 percent production cut and concerns an expansion of the Gaza Strip conflict may disrupt Middle East supplies. The Organization of Petroleum Exporting Countries is likely to make all the output cuts promised at its last meeting, causing global stockpiles to fall this quarter, an official from a Persian Gulf member of the group said. Oil gained yesterday as Israeli warplanes bombarded Palestinian targets and thousands of soldiers moved into Gaza. ``The cuts that OPEC has made are fairly material and as we go forward the impact will be increasingly supportive to the oil price,'' said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. ``I'm not sure there are direct implications to oil supply, but people are concerned about the uncertainty of where this Middle East conflict will end up.'' Oil for February delivery was at $48.08 a barrel, down 73 cents, in electronic trading on the New York Mercantile Exchange at 12:32 p.m. Singapore time. Futures yesterday rose $2.47, or 5.3 percent, to $48.81 a barrel, the highest settlement since Dec. 1. Prices have rallied 38 percent since Dec. 24. Full implementation of OPEC's 4.2 million barrel-a-day reduction in supplies will send inventories below their five-year average, said the official with direct knowledge of OPEC's deliberations, declining to be identified by name because he isn't authorized to speak publicly. It's unlikely the group will convene before its scheduled meeting on March 15, he said. Abu Dhabi Cuts The cutback is from OPEC's September production levels and includes a reduction that took effect Nov. 1. The group agreed to a record cut of 2.46 million barrels a day at a meeting in Oran, Algeria, on Dec. 17. OPEC produces more than 40 percent of the world's oil. Abu Dhabi National Oil Co., the United Arab Emirates state- owned producer, said on Dec. 26 it would reduce its shipments of crude sold to Asia under long-term contracts by as much as 15 percent for some grades in January and February. The country was OPEC's fourth-largest producer in November. Brent crude oil for February settlement was at $49.25 a barrel, down 37 cents, on London's ICE Futures Europe exchange at 12:11 p.m. Singapore time. The contract yesterday added $2.71, or 5.8 percent, to $49.62 a barrel. U.S. Inventories U.S. crude-oil inventories probably rose for a second week amid refinery operating rates that are near post-hurricane lows. Stockpiles probably increased 1 million barrels in the week ended Jan. 2 from 318.7 million the week before, according to the median of analyst estimates before an Energy Department report this week. Gasoline stockpiles rose 1 million barrels from 208.1 million, according to the survey. It would be the fifth consecutive weekly gain. Gasoline supplies have risen in 12 out of the past 14 weeks. Supplies of distillate fuel, a category that includes heating oil and diesel, probably increased 750,000 barrels from 136 million barrels. The Energy Department is scheduled to release its weekly report at 10:30 a.m. on Jan. 7 in Washington. The release time will change this week from 10:35 a.m. previously.

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