Oil Rises for the First Day in Four Before U.S. Supply Report

By Grant Smith

Aug. 13 (Bloomberg) -- Crude oil rose for the first day in four before a report forecast to show that U.S. gasoline supplies fell for a third week.

The U.S. Energy Department will probably say in a report today that gasoline stockpiles fell 2.15 million barrels last week from 209.2 million barrels the week before, according to a Bloomberg survey.

``There's some short-covering taking place before this afternoon's inventory data,'' said Christopher Bellew, a senior broker at Bache Commodities Ltd. in London. ``But the market is unrelentingly weak in the face of flagging demand, and I think Brent may test $110.50 again in due course.''

Crude oil for September rose as much as 99 cents, or 0.9 percent, to $114 a barrel, on the New York Mercantile Exchange, trading for $113.61 at 1:10 p.m. London time. Yesterday, futures declined $1.44, or 1.3 percent, to settle at $113.01 a barrel, the lowest close since May 1.

Oil has slipped 23 percent from a record $147.27 on July 11. Prices are still 58 percent higher than a year earlier.

Brent crude oil for September settlement was at $111.70 a barrel, up 55 cents, on London's ICE Futures Europe exchange at 1:12 p.m. London time. It dropped $1.52, or 1.4 percent, to settle at $111.15 a barrel yesterday, the lowest since May 1.

The Energy Department is scheduled to release its weekly report at 10:35 a.m. in Washington. Analysts are split over whether U.S. crude-oil inventories fell or rose last week because of the impact of Tropical Storm Edouard, according to a Bloomberg News survey.

Inventories of crude oil probably rose 300,000 barrels in the week ended Aug. 8 from 296.9 million the week before, according to the median of responses by 13 analysts.

``In the short-term, the focus will remain on weakening demand for oil and oil products in the U.S.,'' Barbara Lambrecht, an analyst at Commerzbank AG in Frankfurt. ``If crude inventories have increased more than envisaged, or gasoline stocks fallen less than predicted, a further retreat in oil prices could be triggered.''

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net