By Grant Smith April 21 (Bloomberg) -- Oil traded little changed in New York before a report forecast to show U.S. crude inventories declined last week while supplies of gasoline and distillate fuels rose. Oil erased earlier gains as the U.S. dollar strengthened against the euro, curbing the appeal of commodities for hedging inflation. The commodity climbed as much as 0.9 percent earlier as European airports including London Heathrow opened, reviving demand for jet fuel after six days of closures caused by ash clouds from a volcano in Iceland. “The total demand numbers of the last weeks show a constant rise compared to last year. That’s certainly a positive sign given we’re still in a recovery phase,” said Gerrit Zambo, a trader at Bayerische Landesbank in Munich. “The volcano definitely had some short-term impact on European oil markets, there was no demand for jet fuel in the last few days.” Crude oil for June delivery was at $83.83 a barrel, 2 cents lower in electronic trading on the New York Mercantile Exchange as of 12:30 p.m. London time. It earlier climbed 79 cents, or 0.9 percent, to $84.64 a barrel. Brent crude oil for June settlement rose as much as 97 cents, or 1.1 percent, to $85.77 a barrel on the London-based ICE Futures Europe exchange. Brent crude, normally cheaper than contracts on the Nymex, is trading at a premium of around $1.44 a barrel. Yesterday, the June contract in New York rose 72 cents to settle at $83.85. May futures, which rose $2 to $83.45, expired at the close of floor trading. Crude Supplies U.S. inventories of crude oil probably declined 750,000 barrels last week from 354 million barrels as imports slowed and refiners boosted operations, according to the median estimate of 19 analysts in a Bloomberg News survey before the Energy Department report. Supplies increased for 10 consecutive weeks to reach a nine-month high of 356.2 million barrels in the period ended April 2. Refiners probably increased operating rates for a fifth week to meet summer gasoline demand in the U.S., according to the Bloomberg survey. Stockpiles of the motor fuel have probably risen 500,000 barrels from 221.3 million since the week ended Sept. 11. Inventories of distillate fuel, a category that includes heating oil and diesel, rose 1 million barrels from 146.8 million the prior week, according to the survey. Fifteen of the respondents forecast a gain, one predicted a decline and three said there was no change. API Report The industry-funded American Petroleum Institute said yesterday that crude inventories declined 741,000 barrels last week and distillate fuels like diesel fell 3.1 million barrels. “The main catalyst for the rise was the sharp draws in the API inventories data across all the categories,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “That was a bit of a surprise to the market, given a lot of the trends for inventories the last few weeks. In the U.S., the market balance seems to be improving.” Oil-supply totals from the API and Energy Department moved in the same direction 76 percent of the time in the past four years, according to data compiled by Bloomberg. U.S. gasoline demand rose 1.8 percent, recovering from an eight-week low as fuel consumption increased in every region, MasterCard Inc. said in its SpendingPulse report. Motorists bought an average 9.47 million barrels of gasoline a day in the week ended April 16, the company said. Germanico Pinto, the current president of the Organization of Petroleum Exporting Countries, resigned from his post in Ecaudor’s government yesterday, according to an official at his ministry. Finance Minister Maria Elsa Viteri and Non-Renewable Natural Resources Minister Pinto quit as Ecuadorean president Rafael Correa sought to speed up his legislative agenda.

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