Isra-Mart srl: Oil Advances a Fourth Day as China Considers Economic Stimulus

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Oil rose for a fourth day in New York on speculation China’s government will boost the economy of the world’s second-biggest crude consumer, while European leaders prepared a plan to tackle the region’s debt crisis.

Prices gained as much as 0.5 percent after settling yesterday at the highest in almost three months. Chinese Premier Wen Jiabao said economic policy will be fine-tuned as needed and the industry ministry said it is studying “stimulative policies” for smaller companies. European government heads will hold a summit today to agree on a plan to rein in a sovereign- debt crisis that threatens to curb economic growth and slow demand for commodities.

“The market has been re-pricing a view that we might be looking at a low-growth environment, rather than a recessionary environment,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “The market has run up quite a lot in advance” of the European summit, he said.

Crude oil for December delivery was at $93.32 a barrel, up 15 cents, in electronic trading on the New York Mercantile Exchange at 5:41 p.m. Sydney time. The contract yesterday increased 2.1 percent to $93.17, the highest settlement since Aug. 2. Prices are up 2.1 percent this year.

December futures were at a 23-cent premium to January, compared with 24 cents at yesterday’s close. The front-month contract on Oct. 24 settled higher than the next month for the first time since Nov. 20, 2008. The so-called backwardation typically signals an increase in demand or decline in supply in the near term.

China, Europe

Brent oil for December settlement gained 41 cents, or 0.4 percent, to $111.33 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $18.01 to New York crude, compared with a record settlement of $27.88 on Oct. 14.

Chinese officials will make policy adjustments at a “suitable time and by an appropriate degree,” Wen said in a statement published late yesterday. The Ministry of Industry and Information Technology and other government agencies will work to help small businesses facing difficulties, it said separately in a statement today.

European leaders are in Brussels today for their 14th crisis summit in 21 months. A meeting of finance ministers scheduled to precede it was canceled, with officials now set to gather at an as-yet undetermined time to complete the rescue plan’s main elements.

U.S. Stockpiles

U.S. crude supplies in Cushing, Oklahoma, fell on Oct. 21 to the lowest level in a year, according to measurement of tanks using satellite photographs. Total U.S. inventories dropped to the lowest level in 20 months in the week ended Oct. 14, the Energy Department said. The country is the world’s biggest crude-consuming nation.

Oil in New York earlier declined as much as 0.9 percent after the American Petroleum Institute reported that inventories rebounded 2.71 million barrels last week. An Energy Department report today may show supplies increased 1.48 million barrels.

The industry-funded API 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.

Hurricane Rina may become a major storm “at any time” on a track toward Mexico’s Yucatan Peninsula resorts and away from the major oil regions of the Gulf of Mexico, the U.S. National Hurricane Center said in an advisory at 11 p.m. New York time. Mexican crude output may be curbed by the storm.

Petroleos Mexicanos, Latin America’s largest oil producer, said port and offshore operations are normal, according to an e- mail sent to Bloomberg News. Kinetic Analysis Corp., which assesses the potential impact of hazards, estimated the storm may shut in 6.51 million barrels a day of oil produced by Pemex.