Oil traded near a two-week low as signs Europe is struggling to tame a debt crisis that threatens economic growth countered a forecast drop in crude stockpiles in the U.S., the world’s biggest consumer of the commodity. Futures were little changed after falling 1.7 percent yesterday as Moody’s Investors Service said it will review the credit ratings of all European Union countries. An Energy Department report tomorrow may show U.S. crude supplies dropped for the first time in three weeks. Kuwait’s oil minister Mohammad al-Busairy said there is no need to change OPEC’s output or production quotas because “the market is stable.� “We’re expecting further pressure on the market and most of it relates to Europe,� said Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty. in Sydney who predicts oil in New York will trade just above $95 a barrel in the short-term. “The inventory data is likely to continue to paint a picture of a U.S. economy in low but positive growth.� Crude for January delivery was at $97.99 a barrel, up 22 cents, in electronic trading on the New York Mercantile Exchange at 2:40 p.m. Sydney time. The contract yesterday slid $1.64 to $97.77, the lowest close since Nov. 25. Prices are 7.2 percent higher this year after climbing 15 percent in 2010. Brent oil for January settlement was at $107.44 a barrel, up 18 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate was at $9.45, compared with $9.49 yesterday and a record $27.88 on Oct. 14. Fuel Inventories U.S. crude supplies decreased 2.5 million barrels last week, according to the median of 10 analyst estimates in a Bloomberg News survey before the Energy Department report. Gasoline stockpiles climbed 1 million barrels for a fifth week, the survey shows. Distillate fuels, which include diesel and heating oil, may also have risen 1 million barrels. Most members of the Organization of Petroleum Exporting Countries agree there is no need to change production or quotas, al-Busairy said as he left for tomorrow’s talks in Vienna. The group should retain flexibility to adjust production higher or lower in the coming months because of political turmoil in some nations and concern that the world economy may slow, said a delegate, who spoke on condition of anonymity because the talks haven’t started. Saudi Arabian Oil Minister Ali al-Naimi said yesterday he’s happy with OPEC’s current production levels amid demand from “all over.� The kingdom, the world’s largest crude exporter, pumped 10.047 million barrels a day in November, al-Naimi said as he arrived in Vienna for the group’s meeting. Moving Average Oil in New York may extend its decline as the moving average convergence/divergence indicator increases a gap below the signal line, indicating weakness, according to data compiled by Bloomberg. Futures have technical support along the 200-day moving average at $96 a barrel today. Buy orders tend to be clustered near chart-support levels. Hedge-funds and other money managers increased bullish bets on Brent crude by 13,231 contracts, or 18 percent, in the week ended Dec. 6, London-based ICE Futures Europe said yesterday in its weekly Commitment of Traders report. Citigroup Inc.’s price outlook for Brent crude in the first quarter is “moderately bearish,� while the bank raised its full-year forecast for 2012 to average $110 a barrel, Seth Kleinman, European head of energy research in London said yesterday in a research report. 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 at akwiatkowsk2@bloomberg.net

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