Oil traded near its highest in 12 weeks in New York on speculation China’s government will boost the economy of the world’s second-biggest crude consumer, while European leaders prepared to tackle the region’s debt crisis. Prices gained as much as 0.8 percent after settling yesterday at the highest in almost three months. Chinese Premier Wen Jiabao said economic policy will be fine-tuned as needed and the industry ministry said it is studying “stimulative policies” for smaller companies. European government heads will hold a summit today to agree on a plan to rein in a sovereign- debt crisis that threatens to curb economic growth and slow demand for commodities. “Crude oil has been extremely macro-driven lately because of the European crisis,” said Filip Petersson, commodity strategist at Stockholm-based SEB AB. “The general trends have been in the same direction as equities.” Crude oil for December delivery was at $93.45 a barrel, up 28 cents, in electronic trading on the New York Mercantile Exchange at 12:15 p.m. London time. The contract yesterday increased 2.1 percent to $93.17, the highest settlement since Aug. 2. Prices are up 2.3 percent this year. December futures were at a 19-cent premium to January, compared with 24 cents at yesterday’s close. The front-month contract settled higher than the next month Oct. 24 for the first time since Nov. 20, 2008. The so-called backwardation typically signals an increase in demand or decline in supply in the near term. Brent Spread Brent oil for December settlement was down 24 cents, or 0.2 percent, at $110.68 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $17.23 to New York crude, compared with a record settlement of $27.88 on Oct. 14. “At the moment, it is all to do with spreads,” Amrita Sen, a London-based analyst at Barclays Plc wrote in an e-mail. “All crudes should be in backwardation. Demand-supply mismatches are growing and inventories are falling fast.” U.S. crude supplies in Cushing, Oklahoma, fell on Oct. 21 to the lowest level in a year, according to measurement of tanks using satellite photographs. Total U.S. inventories dropped to the lowest level in 20 months in the week ended Oct. 14, the Energy Department said last week. The country is the world’s biggest crude-consuming nation. China Stimulus Chinese officials will make policy adjustments at a “suitable time and by an appropriate degree,” Wen said in a statement published late yesterday. The Ministry of Industry and Information Technology and other government agencies will work to help small businesses facing difficulties, it said separately in a statement today. European leaders are in Brussels today for their 14th crisis summit in 21 months. A meeting of finance ministers scheduled to precede it was canceled, with officials now set to gather at an as-yet undetermined time to complete the rescue plan’s main elements. Oil in New York earlier declined as much as 0.9 percent after the American Petroleum Institute reported that inventories rebounded 2.71 million barrels last week. An Energy Department report today may show supplies increased 1.48 million barrels. The industry-funded 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. Hurricane Rina “has the potential to become a major hurricane today or tonight,” the National Hurricane Center said. “Some weakening is likely after Rina moves near or over the Yucatan peninsula.” Rina’s sustained winds were at 110 miles (175 kilometers) per hour, just below the 111 mph threshold that would make it a Category 3 storm on the five-step Saffir-Simpson scale, the center said in a 5 a.m. Miami time advisory. Mexican crude output may be curbed by the storm. Kinetic Analysis Corp., which assesses the potential impact of hazards, estimated the storm may shut in 6.51 million barrels a day of oil produced by Petroleos Mexicanos, Latin America’s largest oil producer. To contact the reporter on this story: Rachel Graham in Belfast at Rgraham13@bloomberg.net To contact the editor responsible for this story: Steve Voss in London at sev@bloomberg.net

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