Oil advanced from a five-week low in New York as investors bought back contracts on speculation yesterday’s drop, the biggest since September, was exaggerated. West Texas Intermediate futures gained as much as 1 percent after nearing the 50-day moving average of about $94.24 a barrel, according to data compiled by Bloomberg. Buy orders tend to be clustered near chart-support levels. Oil fell yesterday after OPEC raised its output ceiling and Europe’s debt crisis worsened, threatening a recession that may curb demand for commodities. “There is buying interest on the dips,� said Ken Hasegawa, a commodity-derivative sales manager at Newedge Group in Tokyo. “This level, $95 for WTI, is one of the key points to buy.� Crude for January delivery rose as much as 97 cents to $95.92 a barrel in electronic trading on the New York Mercantile Exchange. It was at $95.89 at 4:30 p.m. Singapore time. Yesterday, the contract fell 5.2 percent to $94.95, the lowest settlement since Nov. 4. Prices are 4.6 percent higher this year after climbing 15 percent in 2010. Brent oil for January settlement on the London-based ICE Futures Europe exchange increased as much as $1.44 or 1.4 percent, to $106.46 a barrel. The contract expires today. The more-actively traded February future was up 83 cents at $105.08. The European benchmark crude was at a premium of $10.39 to West Texas grade, compared with a record $27.88 on Oct. 14. ‘Spike to $200’ Brent crude will trade from $100 to $130 a barrel for most of 2012 and average $115, according to Gordon Kwan, head of energy research at Mirae Asset Securities Co. in Hong Kong. A “short-term spike toward $200� can’t be ruled out if economic sanctions against Iran lead to military actions around the Persian Gulf, he said today in an e-mailed report. Iran is the second-largest producer in the Organization of Petroleum Exporting Countries, which met yesterday in Vienna. The 12-member group agreed to raise its production target to 30 million barrels a day, the first change to output quotas in three years. Global oil demand will rise to 90.3 million barrels a day in 2012 from an estimated 89 million this year, the International Energy Agency said Dec. 13. Crude inventories in the U.S., the world’s largest oil consumer, declined 1.9 million barrels last week, the Energy Department said in a report yesterday. Stockpiles were lower even as imports increased and refineries reduced processing. Supplies were forecast to drop 2.5 million barrels, according to the median estimate of 12 analysts surveyed by Bloomberg News. Fuel Supplies Distillate-fuel stockpiles, including heating oil and diesel, climbed 480,000 barrels to 141.5 million, the Energy Department report showed. That’s less than half a forecast 1 million gain in the Bloomberg survey. Gasoline supplies were up 3.8 million barrels at 218.8 million. The euro-area economy is likely to slip back into a recession, according to Ernst & Young LLP. A new plan by political leaders to end the debt crisis hasn’t completely eliminated the risk of a breakup of the currency region, it said in report published in London today. The 27 member states of the European Union accounted for 16 percent of global oil consumption last year, based on BP Plc’s annual Statistical Review of World Energy. To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Ramsey Al-Rikabi in Singapore at ralrikabi@bloomberg.net To contact the editor responsible for this story: Paul Gordon in Hong Kong at pgordon6@bloomberg.net

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