Oil climbed for a third day in New York as investors bet that signs of an economic recovery and shrinking stockpiles in the U.S., the world’s biggest consumer of the commodity, indicate fuel demand may increase. Futures advanced as much as 1.2 percent after the American Petroleum Institute said crude inventories declined 4.57 million barrels last week to the lowest level in almost two years. An Energy Department report today may show supplies fell 2.13 million barrels, according to a Bloomberg News survey. Prices surged 3.4 percent yesterday on U.S. housing data that beat estimates, unexpected growth in German business confidence and signs shipments from Iran may be curbed. “Economic data is painting a better global growth scenario and that’s clearly feeding into firmer oil prices,� said Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty in Sydney who predicts New York futures will settle between $99 and $102 at the end of the year. “We’ll be watching the inventory data tonight following the API.� Crude for February delivery rose as much as $1.20 to $98.44 a barrel in electronic trading on the New York Mercantile Exchange and was at $97.79 at 3:13 p.m. Sydney time. The contract yesterday climbed $3.19 to $97.24. Prices are 7 percent higher this year after gaining 15 percent in 2010. Brent oil for February settlement increased 26 cents, or 0.2 percent, to $106.99 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate futures was at $9.20, compared with $9.49 yesterday and a record $27.88 on Oct. 14. U.S. Stockpiles U.S. crude supplies fell to 330 million barrels last week, the industry-funded API said. That’s the lowest level since the period ended Jan. 22, 2010. Gasoline stockpiles decreased 394,000 barrels, according to the data. The Energy Department report today was forecast to show inventories climbed 150,000 barrels, according to the median of 12 analyst estimates in the Bloomberg News survey. Distillate supplies, a category that includes heating oil and diesel, dropped 2.78 million compared with a projection for a 750,000 barrel decline. The 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. Economic Outlook November housing starts in the U.S. were the most since April 2010 at an annual rate of 685,000, Commerce Department data showed. The median estimate of 79 economists surveyed by Bloomberg called for a gain to 635,000. Building permits, a proxy for future construction, climbed to a 681,000 annual pace in November, the highest level since March 2010. The Ifo institute’s business climate index in Germany, based on a survey of 7,000 executives, climbed to 107.2 from 106.6 in November, the Munich-based institute said yesterday. Economists predicted a drop to 106, the median of 36 forecasts in a Bloomberg News survey showed. Iran, the second-largest producer in the Organization of Petroleum Exporting Countries, will probably stockpile more unsold crude at sea as foreign buyers avoid the country’s oil amid the prospect of renewed international sanctions, according to consultant JBC Energy GmbH, a Vienna-based consultant. Participants in what was described as a meeting of “like- minded nations� asked Iran “to satisfy requests by the international community for immediate clarification� on its nuclear program, the Italian Foreign Ministry said yesterday in an e-mailed statement. European Union foreign ministers are scheduled to meet next month to discuss possible sanctions on Iranian oil. The U.S. approved new restrictions on the country’s oil industry and banking system on Nov. 21 in an attempt to deter buyers of Iranian crude and thwart its nuclear program. To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at akwiatkowsk2@bloomberg.net

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