Oil Rises

Crude oil rose after China, the world’s second-biggest energy-consuming country, cut interest rates by the most in 11 years to bolster economic growth.

Chinese fuel demand has fallen sharply” since September because of credit-market turmoil, the country’s biggest oil producer, China National Petroleum Corp., said Nov. 17. Prices also climbed after a government report showed that U.S. fuel use climbed 510,000 barrels to 19.5 million barrels a day last week.

Crude oil for January delivery increased $3.67, or 7.2 percent, to settle at $54.44 a barrel at 2:42 p.m. on the New York Mercantile Exchange. Futures have dropped 63 percent since reaching a record $147.27 on July 11.

Markets in the U.S. will be shut tomorrow because of the Thanksgiving holiday.

Crude-oil supplies rose 7.28 million barrels to 320.8 million barrels last week, according to the Energy Department. It was the ninth-straight increase, the longest stretch since April 2005. Stockpiles were forecast to climb 1 million barrels, according to the median of 14 analyst estimates in a Bloomberg News survey.

Crude oil demand may climb as refineries boost processing. Refineries increased operating rates by 1.3 percentage points to 86.2 percent of capacity, the highest since September. A 0.1 percentage-point gain was forecast.

Gasoline inventories rose 1.84 million barrels, or 0.9 percent, to 200.5 million barrels, the department said. A 500,000 barrel gain was forecast, according to the survey.

Gasoline for December delivery climbed 8.49 cents, or 7.8 percent, to $1.1798 a gallon in New York, the highest settlement since Nov. 14. It was the biggest one-day gain since Nov. 4.

The Organization of Petroleum Exporting Countries, which controls more than 40 percent of the world’s crude, is due to meet in Cairo on Nov. 29 after a decision last month to cut production by 1.5 million barrels a day failed to prevent the slump in prices.

Brent crude oil for January settlement increased $3.57, or 7.1 percent, to settle at $53.92 a barrel on London’s ICE Futures Europe exchange.

TradingEconomics.com, Bloomberg.com
11/26/2008 3:07:59 PM