Oil gave up gains to trade near $83 a barrel in New York after a U.S. government report showed fuel demand dropped to the lowest level in more than 10 months as refiners curtailed processing runs. Crude declined 0.4 percent yesterday after the Energy Department reported fuel consumption in the world’s largest oil user fell 0.7 percent to 18.3 million barrels a day last week, the lowest level since November. Refiners operated at 81.9 percent of capacity, the lowest rate since March, as units closed for maintenance before demand for winter rises. “Price weakness was a function of reduced crude oil demand by refiners,” Stephen Schork, president of the Schork Group Inc., said in a report today. “With the switch over from summer grade gasoline to winter grade, refiners shutter their crackers for routine maintenance.” Crude for November delivery was at $82.96 a barrel, up 27 cents, in electronic trading on the New York Mercantile Exchange at 3:08 p.m. Singapore time. Yesterday, the contract lost 32 cents to $82.69. Futures, up 4.2 percent this year, are little changed for the week after three weeks of gains. Prices earlier rose as much as 0.3 percent to $82.97 a barrel before the dollar climbed, limiting investor need to buy assets as a hedge against inflation. The greenback strengthened 0.3 percent to $1.4044 versus the euro, from $1.4084 yesterday in New York. The 16-nation currency reached $1.4122 yesterday, the lowest since Jan. 26. A declining U.S. currency boosts the appeal of commodities. Brent crude for December settlement was at $84.26 a barrel, up 5 cents, on the ICE Futures Europe exchange in London. Jobless Claims U.S. initial jobless claims unexpectedly increased to 462,000 in the week ended Oct. 9, a Labor Department report yesterday showed. “It’s clear the U.S. economy is still barely holding on,” Mike Sander of Sander Capital Advisors in Seattle said today in an e-mailed note. “Oil is still fighting resistance in the $83 price range. I see the price of oil staying between the range of $85 and $75 for the near future.” U.S. refiners processed a total of 14.4 million barrels a day in the week to Oct. 8, the least since the period ending March 19, the Energy Department said. Gasoline stockpiles fell 1.77 million barrels to 218.2 million last week as imports and output decreased, according to the department. Supplies were forecast to slip 1.5 million barrels, according to the median estimate from 19 analysts surveyed by Bloomberg News before the report. Crude inventories dropped 416,000 barrels to 360.5 million, the report showed. Stockpiles were estimated to rise 1.45 million barrels, the survey showed. $100 Oil Oil at $100 a barrel would compensate producers for a slide in the dollar without derailing the global economic recovery, officials from Venezuela and Libya said yesterday at a meeting of the Organization of Petroleum Exporting Countries in Vienna. Crude at $90 to $100 a barrel won’t “harm” growth, according to Venezuelan Energy Minister Rafael Ramirez. The chairman of Libya’s National Oil Corp., Shokri Ghanem, also called for higher prices even as other nations said they were content with prices at $70 to $85. OPEC, which accounts for about 40 percent of global crude supply, agreed to leave production quotas unchanged and called on members to improve compliance with the group’s self-imposed output limits. Analysts polled by Bloomberg News were split over whether oil in New York will rise or fall next week, amid speculation the dollar will decline further and the Federal Reserve may act to support the economy. Fifteen of 35 analysts and traders, or 43 percent, forecast crude will advance through Oct. 22. Fifteen respondents predicted futures will decline and five said there will be little change. Last week, 52 percent of survey participants expected a price drop. To contact the reporters on this story: Christian Schmollinger in Singapore at chrisitan.s@bloomberg.net; Ben Sharples in Melbourne at bsharples@bloomberg.net To contact the editor responsible for this story: Clyde Russell in Singapore at crussell7@bloomberg.net.

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