By Mark Shenk

West Texas Intermediate oil rose as a government report showed that U.S. crude inventories dropped as refineries bolstered operating rates. Brent futures advanced in London.

Stockpiles fell 3.69 million barrels to 379.3 million in the week ended Nov. 28, the Energy Information Administration said. A 1.75 million-barrel gain was projected, according to the median estimate in a Bloomberg survey of eight analysts. Refineries increased operating rates for a fifth straight week.

The global benchmark oils fell 18 percent last month after the Organization of Petroleum Exporting Countries maintained its output target at 30 million barrels a day, opting to let low oil prices force U.S. shale producers to cut supply. Saudi Arabia won’t give up market share “at this time for anybody,” said Prince Turki Al-Faisal, the kingdom’s former intelligence chief.

WTI for January delivery climbed 75 cents, or 1.1 percent, to $67.63 a barrel at 10:31 a.m. on the New York Mercantile Exchange. Futures touched $63.72 on Dec. 1, the lowest price since July 2009.

Brent for January settlement rose 48 cents, or 0.7 percent, to $71.02 a barrel on the London-based ICE Futures Europe exchange.

U.S. crude supplies have declined during December for nine of the last 10 years, according to EIA data. Gulf Coast refiners curb deliveries at the end of the year to reduce local taxes.
‘Tax Considerations’

“This could be the start of the annual end of the year reduction in supply,” Phil Flynn, senior market analyst at the Price Futures Group in Chicago, said by phone. “Deliveries are delayed because of tax considerations and then start again with the start of the new year.”

U.S. crude production increased 6,000 barrels a day to 9.08 million last week, said the EIA, the Energy Department’s statistical arm. Refineries operated at 93.4 percent of their capacity, up 1.9 percentage points from Nov. 21.

Gasoline supplies rose 2.14 million barrels to 208.6 million. Stockpiles were projected to have climbed by 1.5 million barrels. Distillate inventories rose 3.03 million to 116.2 million.
Kuwait, Iraq

Oil producers outside OPEC are “drowning” the market, Kuwait’s Oil Minister Ali al-Omair told parliament, according to the state news agency Kuna. The country won’t take a unilateral decision to boost prices or sacrifice its interests by cutting output, he said.

Iraq, OPEC’s second-largest producer, reached a deal with Kurdish authorities to export oil through Turkey. It will ship as much as 550,000 barrels a day from northern Iraq to the Mediterranean port of Ceyhan along a pipeline operated by the Kurds, according to Safeen Dizayee, a spokesman for the Kurdish Regional Government. The pact will entrench the global supply surplus, predicted BNP Paribas SA.

“The Saudis appear to be digging in their heels and want to protect market share from U.S. producers,” Flynn said.

Saudi Arabia might consider reducing output if there were “reasonably guaranteed oversight” of quotas and assurances that other countries wouldn’t take the kingdom’s market share, Al-Faisal said at an event in London yesterday.

OPEC exceeded its collective target for a sixth straight month in November, even after reducing supply. The 12-member group pumped 30.56 million barrels a day, 424,000 barrels a day less than in October, according to a separate Bloomberg survey of oil companies, producers and analysts. It’s next scheduled to meet on June 5.

Bloomberg