Crude Oil Rises on U.S. Supply Forecasts, Pasadena Explosion

By Grant Smith

Sept. 24 (Bloomberg) -- Oil rose on expectations that a government report will show U.S. crude and fuel inventories declined last week and on reports of an explosion at a petrochemical storage site in Texas.

U.S. crude stockpiles probably extended their 14.2 million- barrel withdrawal of the past four weeks, according to a Bloomberg survey. A tank exploded at a Kinder Morgan Energy Partners LP oil and chemicals storage site in Pasadena, Texas, the click2houston.com Web site reported, citing an unidentified company spokesman.

``News of the explosion along with expectations of draws across the board for this afternoon's inventory data has fueled the early morning rally in oil markets,'' said Rob Laughlin, senior broker at MF Global Ltd. in London.

Crude oil for November delivery gained as much as $1.89, or 1.9 percent, to $108.50 a barrel in electronic trading on the New York Mercantile Exchange. It was at $108.25 at 8:43 a.m. London time.

One employee was injured and fire crews were working to put out the blaze, which started at about 10:45 p.m. local time yesterday in a manifold where two pipelines connect, the click2houston.com Web site reported today.

The site handles petroleum and chemicals and has 100 storage tanks, shipping and receiving oil for several oil companies, the Web site said.

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