Oil Is Little Changed as Manufacturing Data Signal Demand Gain

Nov. 3 (Bloomberg) -- Crude oil was little changed in New York after rising yesterday as data showing global manufacturing expanded signaled that fuel demand may increase.

Oil traded above $78 a barrel after the Institute for Supply Management said its U.S. factory index rose to a three-year high in October. Yesterday’s Chinese data showed the country’s manufacturing expanded at its fastest pace in 18 months.

“The upbeat manufacturing reports from the U.S., China and even Europe has lift sentiment in the market and right now it’s all really sentiment driven,” said Victor Shum, a senior principal at consultants Purvin & Gertz Inc. in Singapore. “Oil continues to take its cues from financial considerations.”

Crude oil for December delivery was at $78.16 a barrel, up 3 cents, on the New York Mercantile Exchange at 12:26 p.m. Singapore time. The contract yesterday gained $1.13, or 1.5 percent, to settle at $78.13 a barrel. Crude has risen 75 percent this year.

Prices had climbed yesterday as U.S. stocks increased, with the Dow Jones Industrial Average gaining 76.71 points, or 0.8 percent, to 9,789.44. Asian equities rose today, with five stocks gaining for every four that fell on the MSCI Asia-Pacific excluding Japan index.

U.S. Inventories

U.S. supplies of distillate fuel, a category that includes heating oil and diesel, declined 850,000 barrels last week from 167.8 million the prior week, according to a Bloomberg News survey of analysts. Stockpiles in the week ended Oct. 2 were at the highest level since January 1983.

U.S. crude-oil inventories probably rose as imports and refinery utilization increased, the survey showed.

Inventories of crude oil rose 1.5 million barrels in the week ended Oct. 30 from 339.9 million the prior week, according to the median of 10 estimates by analysts before the department’s report this week. All 10 forecast a gain.

Refineries operated at 82.1 percent of capacity, up 0.3 percentage point from the previous week.

Gasoline inventories probably added 950,000 barrels from 208.6 million the week before, the survey showed.

The Energy Department is scheduled to release its weekly report at 10:30 a.m. tomorrow in Washington.

Brent crude for December settlement was at $76.65 a barrel, up 10 cents, on the London-based ICE Futures Europe exchange at 12:31 p.m. Singapore time. The contract yesterday climbed $1.35, or 1.8 percent, to $76.55 a barrel.