Oil rises on fears of US supply fall

NEW YORK: Crude oil rose for a second day before a report estimated to show that US crude inventories declined last week. Oil increased to the highest level in a week amid forecasts a government report on Wednesday will show US supplies fell as imports dropped, a survey of analysts showed.

US housing starts rose 8.9% in November, in a sign of a continuing economic recovery that may boost energy demand. “What we’re seeing is a bit of positioning ahead of today's inventory report,” said Brad Samples, a commodity analyst for Summit Energy in Louisville, Kentucky.

“The housing numbers were pretty good, and that always gives us a little boost in the market.” Crude oil for January delivery rose 33 cents, or 0.5% on the New York Mercantile Exchange. Earlier, futures touched $71.59, the highest since December 9. Oil stockpiles probably declined by 2 million barrels in the week ended December 11, from 336.1 million the prior week, according to the median of 17 estimates.

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