U.S. weekly inventory report shows fuel stock rise sharply… Year-on-year rise in U.S. gasoline purchases- Mastercard… Russia says OPEC to make “significant cuts”

Oil was higher on Wednesday, but cut back early gains after U.S. inventory data showed fuel stocks in the world’s largest energy consumer rose sharply last week.

U.S. crude for January delivery touched $45 a barrel on Tuesday, recovering from an overnight slump by more than 4 percent, but by 1618 GMT oil had trimmed gains to trade at $43.07, up $1.00.

London Brent crude was up 48 cents at $42.04.

U.S. crude oil inventories rose by 400,000 barrels to 320.8 million, with distillate and gasoline stocks also up, according to the U.S. Energy Information Administration (EIA). Refinery run rates rose to 3.1 percent to 87.4 percent.

“If you were an oil bear and you were looking for a Christmas gift, you got everything you wanted in this report,” said Phil Flynn, analyst at Alaron Trading in Chicago.

Rising fuel stocks in the United States and other consumer nations have heightened fears of slowing demand for fuel as the global economic slowdown starts to cut into consumption.

The market now looks to OPEC’s Dec. 17 meeting in Algeria where the group is expected to cut as much as 2 million barrels a day in a bid to shore up prices which have fallen by more than $100 dollars since peaking above $147 a barrel in July.

Russia’s energy minister on Wednesday said OPEC members were preparing a “significant cut” in oil production, and that Russian output was likely to decline in 2008 despite government attempts to stimulate production.

Sergei Shmatko also said Russia, the largest oil producer outside the producer group, would make its own proposal at the Algeria meeting, which it will attend as an observer.

“Sentiment rules the oil market at the moment, with most traders tracking equities,” said Andrey Kryuchenkov, vice president of commodities research at VTB Bank.

“A lot of people will wait to see how much OPEC will but by next week, and then whether then can comply with the quota cuts.”

China’s November crude oil imports hit a year low, as the world’s secong-largest oil user shipped in 13.36 million tonnes last month, official data showed, a 14.6 percent cut in daily volumes from October and 1.8 percent down on November last year.

U.S. weekly inventory report shows fuel stock rise sharply… Year-on-year rise in U.S. gasoline purchases- Mastercard… Russia says OPEC to make “significant cuts”

Chris Baldwin
LONDON, Dec 10 (Reuters)