Oil Trades Near $79 as U.S. Stocks Build Outweighs China Gains

By Christian Schmollinger

Nov. 11 (Bloomberg) -- Oil traded near $79 a barrel after an industry report showed U.S. crude and fuel stockpiles rose, outweighing signs of economic expansion in China.

The American Petroleum Institute said late yesterday crude inventories climbed 1.22 million barrels last week to 337.5 million and gasoline supplies rose by 1.4 million barrels. China, the second-largest user after the U.S., said October net oil imports were 18.98 million tons, or 4.47 million barrels a day, the second-highest on record.

“The crude build was expected, but typically gasoline should draw this time of year so it’s a bearish number because of the gasoline build,” said Clarence Chu, a trader with options traders Hudson Capital Energy in Singapore. “People are expecting the Chinese demand to grow so the industrial output numbers are supportive for this.”

Crude oil for December delivery traded at $79.09 a barrel, up 4 cents, in electronic trading on the New York Mercantile Exchange at 4:04 p.m. Singapore time. Yesterday, the contract fell 38 cents to settle at $79.05. Prices have gained 77 percent this year.

Crude declined as Tropical Depression Ida weakened after coming ashore yesterday, allowing workers to return to production platforms in the Gulf of Mexico. Energy producers idled about 43 percent of oil and 28 percent of natural-gas output in the Gulf because of Ida, the Minerals Management Service said.

Chevron Corp. said its Mississippi refinery was unaffected and Murphy Oil Corp. plans to resume output at its offshore Thunder Hawk platform today.

China Imports Rise

China’s crude imports rose as industrial production spurred fuel demand. Net purchases in October were 13 percent higher than in September. The country’s industrial output for the month rose 16.1 percent. Power generation grew at the fastest pace in 19 months.

Import of oil products, such as gasoline and diesel, dropped to 2.38 million tons from 2.8 million tons in September. Exports were 2.09 million tons from 2.08 million tons in September.

The Energy Department will report that U.S. inventories of crude oil rose 1 million barrels last week, according to the median of 15 estimates by analysts surveyed by Bloomberg News.

Gasoline stockpiles probably dropped 400,000 barrels from 208.3 million the week before, the survey showed. Supplies of distillate fuel, a category that includes heating oil and diesel, declined 800,000 barrels from 167.4 million the prior week, according to the survey.

The department is scheduled to release its weekly report tomorrow at 11 a.m. in Washington, a day later than usual because of the Veterans’ Day holiday today.

Gasoline, IEA

The Petroleum Institute collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.

Gasoline consumption in the U.S. fell 2.3 percent last week to the lowest in four weeks, MasterCard Inc. said in a report.

Motorists bought an average 9.1 million barrels of gasoline a day in the week ended Nov. 6, MasterCard, the second-biggest credit-card company, said in its SpendingPulse report yesterday. The decline from the prior week is the biggest since Oct. 9.

The International Energy Agency cut its long-term forecast for global oil demand yesterday as the economic crisis reduces consumption in developed economies and environmental policies encourage alternative energy use.

Global oil demand is expected to advance 1 percent a year to 105 million barrels a day by 2030 from 85 million in 2008, the adviser to 28 nations said in its annual World Energy Outlook. The figure is below last year’s 2030 estimate of 106 million barrels a day.

Brent crude for December settlement was at $77.55 a barrel, up 6 cents on the London-based ICE Futures Europe exchange at 4:04 p.m. Singapore time. Yesterday, the contract fell 27 cents, or 0.3 percent, to end the session at $77.50.

To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net