-

December 22, 2011, 6:11 AM EST

By Ben Sharples and Grant Smith

Dec. 22 (Bloomberg) — Oil gained for a fourth day in New York after U.S. crude inventories declined the most in a decade, adding to signs that the world’s biggest consumer of crude may avoid a recession.

Futures rose as much as 0.7 percent after gaining 1.5 percent yesterday as Energy Department data showed stockpiles fell 10.6 million barrels, the largest decrease since February 2001. New York oil will average a record $100 a barrel next year as the U.S. averts recession, while London-traded Brent will decline from the 2011 mean, according to a Bloomberg News survey of analysts.

“The big draw was quite bullish,” said Gerrit Zambo, a trader at Bayerische Landesbank in Munich, who predicts oil prices will remain little changed in early 2012. “Macro data in the past week has been mostly positive. I’m slightly optimistic that we won’t fall into a deep recession, and if recession comes it’ll be over quicker than people expect.”

Crude for February delivery on the New York Mercantile Exchange climbed as much as 72 cents to $99.39 a barrel, the highest since Dec. 14, and was at $99.09 at 9:11 a.m. London time. The contract yesterday increased $1.43 to $98.67, the highest close since Dec. 13. Prices have risen 8.4 percent this year after climbing 15 percent in 2010.

Brent oil for February settlement was at $107.79 a barrel, up 8 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate futures was at $8.70, compared with $9.04 at yesterday’s settlement and a record $27.88 on Oct. 14.

Record Oil

WTI oil will reach an average of $100 a barrel in 2012, based on the median of 27 analyst estimates compiled by Bloomberg, topping the all-time high of $99.75 set in 2008. The benchmark grade is on course to average $95 a barrel this year. Brent will average $109 next year, compared with $110.98 so far this year, a survey of 28 analysts showed.

U.S. crude stockpiles were forecast to decrease 2.13 million barrels last week, according to a Bloomberg News survey. They shrank as refiners cut holdings and reduced imports before Jan. 1, when Texas and Louisiana assess taxes based on the fair- market value of inventories. Overseas purchases dropped to 7.58 million barrels a day, the lowest since September 2008, according to the Energy Department report.

Stockpiles at Cushing, Oklahoma, the delivery point for West Texas Intermediate futures, slid 990,000 barrels to 30.2 million, the report showed.

Quarterly Gain

Oil is up 25 percent this quarter, the biggest gain since the second quarter of 2009, as the European Union and the U.S. seek support from the Middle East and Asia for sanctions against Iran, the second-biggest producer in the Organization of Petroleum Exporting Countries.

EU nations, the U.S. and Asia-Pacific allies discussed possible measures in Rome on Dec. 20 and vowed to increase pressure on Iran to abandon a suspected nuclear weapons program, according to an Italian Foreign Ministry statement.

The U.S. sent high-ranking officials to Saudi Arabia and Israel to discuss targeting Iran’s energy exports and is developing plans to implement sanctions on its central bank that complicate international purchases of crude. It is also urging Japan, the second-biggest buyer of Iran’s oil, to reduce its reliance on imports from the country, according to diplomats and analysts who are in consultation with the Obama administration.

Iran pumped about 5 percent of the world’s oil last year, according to BP Plc’s annual Statistical Review of World Energy. It also borders the Strait of Hormuz, the sea channel through which about 15.5 million barrels a day, or a sixth of global shipments, are transported, the U.S. Energy Information Administration says on its website.

Oil may extend its rally in New York as futures approach a “golden cross” formation on the daily technical chart, according to data compiled by Bloomberg. The 50-day moving average, at $95.41 a barrel today, has pared a discount to the 200-day mean to 32 cents, the smallest since Aug. 11. Investors typically buy contracts when a shorter-term moving average crosses above a longer-term one.

Original Article