Oil rose a third day in New York on signs that the U.S. economy will be spared a recession and amid growing pressure on Iran to curtail its nuclear program. Futures advanced as much as 1.3 percent after data from the American Petroleum Institute showed crude inventories dropped to the lowest in almost two years. Analysts in a Bloomberg News survey predicted the Energy Department will say today supplies fell 2.13 million barrels. The February contract surged 3.4 percent yesterday on U.S. housing data that beat estimates, unexpected growth in German business confidence and concern that shipments from Iran may be curbed. “Oil has been strengthening as we get more positive U.S. economic data, such as housing starts, along with a recovery in the euro and the possibility of Iranian reprisals,� said Robert Montefusco, senior broker at Sucden Financial in London. Crude for February delivery rose as much as $1.26 to $98.50 a barrel in electronic trading on the New York Mercantile Exchange. It was up 0.7 percent at $97.93 at 11:20 a.m. London time. The contract yesterday climbed $3.19 to $97.24. Front- month futures have risen 7.2 percent this year after gaining 15 percent in 2010. Brent oil for February settlement on the London-based ICE Futures Europe exchange rose as much as $1.03, or 1 percent, to $107.76 a barrel. The European benchmark contract was at a premium of $9.31 to New York-traded West Texas Intermediate grade. The spread widened to a record $27.88 on Oct. 14. Pressure on Iran The Obama administration and European Union governments are seeking help from Arab and Asian allies to reduce Iran’s oil revenues. EU nations, the U.S. and Asia-Pacific allies discussed possible measures in Rome yesterday and agreed to increase pressure on Iran, the world’s No. 3 crude exporter in 2010, to abandon its suspected nuclear weapons program, according to an Italian Foreign Ministry statement. U.S. crude inventories fell to 330 million barrels last week, the lowest since the period ended Jan. 22 last year, the industry-funded API said yesterday. Gasoline stockpiles decreased 394,000 barrels to 213.9 million, based on the API data. The Energy Department report may show supplies probably climbed 1.5 million barrels, according to the median estimate of 12 analysts surveyed by Bloomberg News. Distillate-fuel stockpiles, including heating oil and diesel, are expected to have declined 750,000 barrels. The Energy Department will release its weekly report at 10:30 a.m. in Washington today. Oil in New York has technical resistance along the middle Bollinger Band, around $98.20 a barrel today, according to data compiled by Bloomberg. Sell orders tend to be clustered near chart-resistance levels. U.S. Housing Market Home builders in the U.S. broke ground in November on more houses than at any time in the past 19 months. Housing starts increased 9.3 percent to an annual rate of 685,000, the highest since April 2010, a Commerce Department report showed yesterday. A median 635,000 gain was forecast by 79 economists surveyed by Bloomberg News. A report today may show sales of existing homes in the U.S. increased last month. “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 a barrel at the end of the year. “We’ll be watching the inventory data tonight following the API.� To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net Grant Smith in London at gsmith52@bloomberg.net To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net

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