Oil rose a seventh day in New York, the longest run of gains since February, after U.S. gasoline supplies unexpectedly shrank and housing starts climbed, signaling fuel demand may increase amid an economic recovery. Futures advanced as much as 1 percent to the highest level in seven weeks. Gasoline stockpiles decreased 1.8 million barrels last week, the Energy Department said in a report. They were forecast to climb by 1.2 million, according to a Bloomberg News survey. Crude inventories also fell and petroleum consumption rose for the third week. New U.S. home construction increased in June to the highest level in almost four years, figures from the Commerce Department showed. “The weekly data showed reasonable demand for gasoline that’s not as weak as had been initially thought,� said Peter Luxton, an analyst at Informa Global Markets in London, who forecasts that Brent crude will trade at $105 to $110 a barrel over the next three months. “I’d hesitate to use the word tightness, but there’s not as much slack in the market as there’d otherwise have been.� West Texas Intermediate crude for August delivery gained as much as 95 cents to $90.82 a barrel in electronic trading on the New York Mercantile Exchange and was at $90.60 as of 9:15 a.m. London time. The contract expires tomorrow, and the more active September contract was up 79 cents at $90.96. Front-month prices gained 65 cents to $89.87 yesterday, the highest close since May 29 and are 8.3 percent lower this year. Brent for September settlement was at $106.17 a barrel, up 1 percent, on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium to WTI of $15.22, from $14.99 yesterday. Oil Stockpiles U.S. oil demand averaged almost 19 million barrels a day in the past four weeks, up 0.4 percent, for a third consecutive year-on-year increase, the Energy Department report showed yesterday. Consumption in the past seven days rose 0.3 percent week-on-week to 18.6 million barrels a day. Crude stockpiles dropped 809,000 barrels, according to the report. They were forecast to slip 1.3 million barrels, the median estimate of 10 analysts surveyed by Bloomberg News showed. Distillate inventories, a category that includes heating oil and diesel, increased 2.6 million barrels, compared with a projected gain of 1.3 million. Housing starts climbed 6.9 percent to a 760,000 annual pace after a revised 711,000 rate in May that was faster than initially estimated, the Commerce Department reported in Washington yesterday. The median forecast of 79 economists surveyed by Bloomberg News called for 745,000. Mild Positive “U.S. inventory figures are doing the right thing,� said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “Housing is an area of the U.S. economy where we have seen what looks to be quite a step-up in growth in recent months, so that’s a mild positive.� Crude’s decline this year has slowed a record expansion of U.S. oil drilling. The nation’s rig count rose 7.8 percent in the three months ended June 30, down from 18 percent a year earlier and the third-lowest quarterly increase since March 2009, according to Baker Hughes Inc., a Houston oil-services company. Horizontal rigs dropped last week for the first time since May, said Smith Bits, a unit of Huston-based Schlumberger Ltd., the world’s largest oilfield-services provider. To contact the reporters 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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