Oil rose from a four-week low after U.S. crude inventories unexpectedly dropped the most since August 2009, signaling fuel demand in the world’s biggest consumer may be recovering. Futures retraced some of yesterday’s 2.3 percent slump, snapping four days of declines, after the Energy Department said stockpiles shrank 7.3 million barrels last week. They were forecast to be unchanged, according to a Bloomberg News survey of analysts. Gasoline and distillate supplies also decreased. “It’s good to see stockpiles sliding because that’s giving a sense of relief that something’s happening” with oil fundamentals, said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney. “It seems to be the start of a trend. It could be that consumption is improving.” The December contract advanced as much as 97 cents, or 1.2 percent, to $81.41 a barrel, in electronic trading on the New York Mercantile Exchange, and was at $81.24 at 1:49 p.m. Singapore time. It fell yesterday to $80.44, the lowest settlement since Oct. 19. Crude slumped yesterday amid speculation that China, the world’s biggest energy-consuming country, will raise interest rates to cool economic growth. Prices also dropped on concern Europe’s debt crisis is worsening. Oil has fallen 4.3 percent since last week and is up 2.4 percent this year. Fuel Supplies Gasoline inventories slipped 2.66 million barrels to 207.7 million, the lowest level since the week ended Oct. 16, 2009, the Energy Department report showed. They were projected to slide 750,000 barrels, according to the Bloomberg News survey. Imports were the lowest since January 2004. Stockpiles of distillate fuel, a category that includes heating oil and diesel, fell 1.11 million barrels to 158.8 million. They were forecast to decline 2 million barrels. The Energy Department report showed crude imports tumbled 2.8 percent to 7.86 million barrels a day, the lowest level since December. “The weekly data’s most striking feature may have been the continued weakness in imports,” Antoine Halff, head of energy research at broker Newedge, said in a report yesterday. Brent crude for January settlement rose as much as $1.04, or 1.3 percent, to $84.32 a barrel on the London-based ICE Futures Europe exchange. The contract yesterday slid 1.7 percent to $83.28. To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Christian Schmollinger in Singapore at Christian.s@bloomberg.net To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net

Source