By Alexander Kwiatkowski
Dec. 11 (Bloomberg) -- Crude oil traded little changed, paring earlier gains, on speculation that the deepening world recession will continue to depress fuel demand.
Oil gave up early gains on concern that consumers are cutting back fuel consumption amid the spreading economic slowdown. A U.S. government report yesterday showed fuel inventories increased as demand declined. Prices rose earlier after a weakening U.S. dollar boosted the appeal of commodities as an inflation hedge.
“The bearish fundamental situation on the oil side is pushing prices down again,” said Gerrit Zambo, an oil trader at BayernLB in Munich. Prices are falling on “the stock build of yesterday and the continuing reduction in oil demand in the U.S.”
Crude oil for January delivery traded at $43.55, up 3 cents, in electronic trading on the New York Mercantile Exchange at 8:36 a.m. London time. It earlier gained as much as 97 cents, or 2.2 percent, to $44.49 a barrel.
Futures, which have dropped 54 percent this year, are heading for the biggest annual decline since trading began in 1983 as global economies falter.
The U.S. government released a report yesterday that showed inventories of gasoline and distillate fuel, a category that includes heating oil and diesel, climbed last week as refineries increased operating rates and demand dropped.
To contact the reporter on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net
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