Oil rose to its highest price in more than a week as traders bet a larger-than-forecast decline in U.S. jobless claims signaled economic growth is accelerating in the world’s biggest crude-consuming nation. Futures surged the most in four months yesterday after the Labor Department said applications for unemployment benefits fell to the lowest level since 2008 in the week ended Nov. 20. Oil prices at $100 a barrel would be “comfortable” for producing countries because they offset rising food costs, said Shokri Ghanem, chairman of Libya’s National Oil Corp. “Oil has established a new trading range between $82.50 and $89.50 as the demand side gets a little stronger,” said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. “A lot of the strength today can be attributed to short-covering before the U.S. holiday.” Crude for January delivery rose as much as 52 cents, or 0.6 percent, in electronic trading on the New York Mercantile Exchange to $84.38 a barrel, the highest price since Nov. 16. The contract was at $84.22 a barrel at 11:48 a.m. London time. Brent crude for January settlement advanced 42 cents to $86.26 a barrel on the London-based ICE Futures Europe exchange. Yesterday, crude in New York advanced $2.61, or 3.2 percent, to $83.86 a barrel, the highest settlement since Nov. 15. Brent gained 3.1 percent to $85.84 Floor trading in New York will be halted today for the U.S. Thanksgiving holiday. Electronic deals will continue with Nov. 26 as the closing date for all transactions. Backwardation Likely Demand for distillates including diesel was 3.9 percent higher in the week ended Nov. 19 compared with a year ago, the Energy Department said yesterday. Oil markets are poised to enter backwardation, with prompt- delivery prices higher than those for later supply, as demand for crude increases, according to Barclays Plc. “Global spare crude capacity has fallen this year and is likely to end the year at only a little above 5 percent,” a team led by Paul Horsnell, head of commodities research at Barclays Capital in London, wrote in a report dated yesterday. “We expect a more volatile and backwardated market to emerge rapidly.” Consumer spending, which accounts for 70 percent of the U.S. economy, increased for a fifth month in October as a rebound in incomes spurred purchases at the beginning of the fourth quarter, Commerce Department figures showed yesterday. Incomes were up 0.5 percent. Risk appetite “improved with the focus on positive U.S. data flow,” Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd. in Melbourne, said in a note today. “Although U.S. crude inventories unexpectedly rose last week, the key reason was higher imports, which could suggest stronger demand.” Inventory Report Crude supplies rose 1.03 million barrels to 358.6 million in the week ended Nov. 19, according to the Energy Department report. A 2 million-barrel decrease was forecast, according to the median of 16 analyst responses in a Bloomberg News survey. Distillate fuel supplies, including diesel and kerosene, dropped for a ninth week, declining 541,000 barrels to 158.3 million, the Energy Department said. Gasoline stockpiles climbed 1.9 million barrels to 209.6 million, the first gain in five weeks. “The past month has seen the overhang in U.S. diesel supplies progressively come down on a combination of exports and improved freight demand lifting diesel consumption,” Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA, said in a note yesterday. To contact the reporters on this story: Grant Smith in London at gsmith52@bloomberg.net To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net

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