Oil Hits One-month High over $96 a Barrel

Oil rose to a one-month high above $96 a barrel on Wednesday ahead of a U.S. government report expected to show crude inventories in the world's top consumer fell for a sixth straight week.

Prices also gained as Turkish war planes bombed Kurdish guerrilla targets in northern Iraq on Wednesday, a reminder to investors of risks to crude supplies in the Middle East.

U.S. crude rose $1.94 to $96.07 a barrel by 9:55 a.m. EST, the highest level since late November. London Brent was up $2.02 at $94.72. Volume remained light due to the holiday in the United Kingdom.

U.S. inventory data, to be released on Thursday, a day later than normal due to the Christmas holiday, is expected to show crude stocks fell by 1.8 million barrels as bad weather in Texas and the Gulf slowed imports.

Crude stockpiles in the United States are already at their lowest level in nearly three years, stoking fears of a winter supply crunch.

Oil has been holding in a range below the all-time peak of $99.29 reached last month as dealers weigh tightening inventories against the threat that an economic slowdown will cut consumption.

TradingEconomics.com, Reuters
12/26/2007 9:34:41 AM