VINACHEM

Oil rose for the first time in fourdays in New York after U.S. stockpiles unexpectedly declined andpolitical leaders said they’re optimistic about a budgetagreement being reached in the world’s biggest crude consumer.

Futures advanced as much as 0.5 percent after sliding 0.8percent yesterday to a two-week low. Republican House Speaker John Beohner is optimistic that talks on the tax increases andspending cuts known as the fiscal cliff can “avert this crisissooner rather than later,” he told reporters. President Barack Obama said he hopes to reach a deal before Christmas. U.S. crudesupplies slid 347,000 barrels last week, an Energy Departmentreport showed. They were forecast to climb 350,000 barrels,according to a Bloomberg News survey of analysts.

“The fiscal cliff is a very significant thing for worldeconomies and therefore oil demand,” said Ric Spooner, a chiefmarket analyst at CMC Markets in Sydney. “The consensus view isthat a reasonable compromise will be reached.”

Crude for January delivery climbed as much as 40 cents to$86.89 a barrel in electronic trading on the New York Mercantile Exchange and was at $86.69 at 3:04 p.m. Singapore time. Thecontract pared a decline of as much as $1.82 yesterday to closedown 69 cents at $86.49, the lowest since Nov. 15. Prices havefallen 12 percent this year.

Brent for January settlement rose 20 cents to $109.71 abarrel on the London-based ICE Futures Europe exchange. TheEuropean benchmark contract was at a premium of $23.02 to WestTexas Intermediate futures, unchanged from yesterday.

Fuel Supplies

More than $600 billion in automatic tax increases andspending cuts will kick in next year if an agreement on the U.S.budget isn’t reached. President Obama said at the White Housethat more Republicans are agreeing on a “balanced approach” tocut the deficit.

U.S. gasoline supplies gained 3.87 million barrels lastweek, the Energy Department figures showed. They were forecastto rise 900,000 barrels, according to the median estimate of 11analysts in the survey. Distillate inventories, a category thatincludes heating oil and diesel, fell 800,000 barrels, comparedwith a projected increase of 500,000 in the survey.

Japan’s crude imports from Iran fell 48 percent in Octoberfrom September to 469,024 kiloliters, or about 95,000 barrels aday, according to data today from the Ministry of Finance.That’s the second-lowest level since the U.S. exempted the Asiannation from sanctions targeting the Middle East country’snuclear program. Imports declined 63 percent from a yearearlier.

U.S. and European Union officials say Iran’s nucleardevelopment is aimed at producing atomic weapons, while thegovernment in Tehran says the project is for civilian purposes.U.S. Secretary of State Hillary Clinton in March exempted Japanfrom sanctions on banks doing business with Iran, saying it had“significantly reduced” imports from the Persian Gulf nation.The waiver was renewed for six months, according to a StateDepartment release on Sept. 14.