VINACHEM

West Texas Intermediate oil climbedfor a fifth day, capping the longest rally this year, as theU.S. economy grew at a faster pace than previously estimated inthe fourth quarter.

Prices reached a six-week high as gross domestic productrose at a 0.4 percent annual rate, up from prior estimate of 0.1percent, the Commerce Department reported today in Washington.Oil demand in the U.S., the biggest crude-consuming country,increased by the most since December in the seven days endedMarch 22, the Energy Information Administration said yesterday.WTI’s discount to Brent shrank to the smallest since July.

“GDP is better than earlier estimates and a strong economyis bullish for oil,” said Michael Lynch, president of StrategicEnergy & Economic Research in Winchester, Massachusetts. “Itlooks like the spread will keep contracting.”

WTI for May delivery gained 65 cents, or 0.7 percent, to$97.23 a barrel on the New York Mercantile Exchange, the highestsettlement since Feb. 14. The rally since March 21 was thelongest since Dec. 20 and brought crude’s advance for thequarter to 5.9 percent.

The volume of all futures traded was 26 percent below the100-day average at this time of day at 3:26 p.m. Pricesincreased 3.8 percent this week, a fourth consecutive rally.They were 5.6 percent higher this month. The market will beclosed tomorrow for Good Friday.

Brent Drops

Brent for May settlement rose 33 cents, or 0.3 percent, toend the session at $110.02 a barrel on the London-based ICEFutures Europe exchange. The volume of all contracts traded was14 percent below the 100-day average. Prices gained 2.2 percentthis week. They fell 1.2 percent in March and 1 percent in thequarter.

The European benchmark grade’s premium to WTI shrank $12.79a barrel, the narrowest since June 25.

The 0.4 percent rate of economic growth in the fourthquarter followed a 3.1 percent pace in the third, revisedCommerce Department figures showed. The slowdown was because ofthe biggest slump in military spending since 1972 and a cut inthe rate of inventory building.

“GDP is better than it was,” said Kyle Cooper, directorof commodities research at IAF Advisors in Houston. “The spreadstill has further room to contract. It could easily trade backdown to $5 within the next 12 to 24 months.

The U.S. accounted for 21 percent of global oil consumptionin 2011, according to BP Plc(BP)’s Statistical Review of WorldEnergy.

Fuel Demand

Petroleum demand in the U.S. increased 6.2 percent to 18.9million barrels a day, the most since Feb. 8, the EIA, theEnergy Department’s statistical arm, said yesterday.

Oil also gained as OPEC crude production slipped to a 16-month low in March as output from Nigeria dropped to the leastin more than three years, a Bloomberg survey showed.

Output in the 12-member Organization of Petroleum ExportingCountries declined 70,000 barrels, or 0.2 percent, to an average30.554 million barrels a day this month from a revised 30.624million in February, the survey of oil companies, producers andanalysts showed.

Futures fell as much as 0.3 percent in intraday trading asmore Americans than projected filed applications forunemployment benefits. Jobless claims increased 16,000 to357,000 last week, the highest level in more than a month, theLabor Department said. Economists surveyed by Bloomberg forecastan increase to 340,000.

Economic Outlook

‘‘Although the overwhelming evidence appears to be thatthere are improvements in the economy, the picture isn’t arobust one,” said Addison Armstrong, director of marketresearch at Tradition Energy in Stamford, Connecticut. “Thejobless claims took some of the support out of the market. Todayis the last trading day of the quarter and you’ve got someprofits and you probably want to take them.”

WTI may rise toward $100 after the May contract settledabove $95.55 a barrel, a key Fibonacci level, for a third day,according to technical analysis from Bill Baruch, a seniormarket strategist at Iitrader.com, a commodity-trading firm inChicago. The figure is the 61.8 percent retracement level from aMarch 4 low of $89.79 on a three-month Fibonacci study.

The price may test $100 if it breaches $97.92, the Feb. 20intraday high, Baruch said yesterday.

Implied volatility for at-the-money WTI crude optionsexpiring in May was 16.1 percent, up from 16 percent yesterday.The figures have slipped from 24.7 percent on Feb. 21.

Electronic trading volume on the Nymex was 339,489contracts as of 3:27 p.m. local time. It totaled 458,517contracts yesterday, 18 percent below the three-month average.Open interest was 1.71 million contracts.