Oil Rises Above $95 on Speculation Supplies Fell a Sixth Week

By Mark Shenk

Dec. 26 (Bloomberg) -- Crude oil rose above $95 a barrel in New York on speculation an Energy Department report tomorrow will show that U.S. inventories fell for a sixth week.

Supplies dropped 1.63 million barrels in the week ended Dec. 21, according to the median of eight responses in a Bloomberg News survey of analysts. Prices also rose after Turkish jets bombed suspected Kurdish rebel camps in northern Iraq, the military said on its Web site.

``Most people are expecting tomorrow's report to show yet another drop because of fog in the Houston Ship Channel and other disruptions,'' said Tom Bentz, a broker at BNP Paribas in New York. ``There's some increased concern because of attacks by Turkish airplanes against the Kurds.''

Crude oil for February delivery rose $1.36, or 1.4 percent, to $95.49 a barrel at 9:21 a.m. on the New York Mercantile Exchange. Oil reached $95.65 today, the highest since Nov. 27. Futures touched a record $99.29 on Nov. 21. Prices are up 56 percent from a year ago.

There was no floor trading in New York yesterday because of the Christmas holiday. Electronic trading began at 6 p.m. yesterday.

``There was very light trading on Friday and Monday and we can expect the same through the remainder of the week,'' said Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut.

The Energy Department is scheduled to release its weekly report on inventories tomorrow at 10:30 a.m. in Washington, a day later than usual because of Christmas.

The Houston Ship Channel, which serves the largest U.S. petroleum port, was closed to tanker traffic on Dec. 19 because of fog.

Bombing Raid

Today's bombing raid was at least the third air operation in Iraq this month. Troops were briefly sent across the border on Dec. 17, according to the army. Turkey says it is using intelligence from the U.S. to target the Kurdistan Workers Party, or PKK. Iraq has the world's third-largest crude-oil reserves.

Brent crude for February settlement rose $1.51, or 1.6 percent, to $94.21 a barrel on London's ICE Futures Europe exchange.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net .

Last Updated: December 26, 2007 09:31 EST