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By Bloomberg

West Texas Intermediate held gains from the biggest advance in two weeks after government data showed crude stockpiles fell at the largest U.S. storage hub. Brent was steady as Libya shut its main oil field.

Futures were little changed in New York after rising 1.9 percent yesterday. Crude supplies at Cushing, Oklahoma, the delivery point for WTI contracts, shrank by 551,000 barrels last week, the first decline in four weeks, the Energy Information Administration reported. Libya halted its Sharara field that had been disrupted by strikes and violence in the past, according to two people with direct knowledge of the matter.

Oil is trading in a bear market amid signs that global supply is outpacing demand. Leading OPEC producers have resisted calls to cut output as they compete with the U.S., which is pumping at the fastest pace in more than 30 years. The price collapse is a "concern for everyone," Venezuela's Foreign Minister Rafael Ramirez said as he met Saudi Arabia's Oil Minister Ali Al-Naimi yesterday.

"The U.S. inventories and news from Libya are supportive," Ole Sloth Hansen, an analyst at Saxo Bank A/S in Copenhagen, said by e-mail. "The Sharara disruption highlights the current chaos in Libya, and also how fragile the production is."

Crude Supplies

WTI for December delivery was at $78.84 a barrel in electronic trading on the New York Mercantile Exchange, up 16 cents, at 9:38 a.m. London time. The contract climbed $1.49 to $78.68 yesterday. The volume of all futures traded was about 16 percent below the 100-day average for the time of day. Prices have decreased 20 percent this year.

Brent for December settlement was 34 cents higher at $83.23 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark crude traded at a $4.38 premium to WTI. The spread closed at $4.27 yesterday, the narrowest since Oct. 22.

Crude stockpiles in the U.S., the world's biggest oil consumer, increased by 460,000 barrels to 380.2 million in the week ended Oct. 31, the Energy Information Administration reported yesterday. Supplies were projected to rise by 2.35 million, according to the median estimate in a Bloomberg News survey of eight analysts.

"This is a turning point for U.S. crude stockpiles to expand less and start to drop as refiners increase their operating rates to meet heating demand in the winter," Kang Yoo Jin, a commodities analyst at Woori Investment & Securities Co. in Seoul, said by phone today.

Refiners boosted utilization to 88.4 percent of capacity, the first gain in six weeks, the data showed. Distillate inventories, including heating oil and diesel, slid 724,000 barrels, while gasoline supplies were down by 1.38 million.

Officials at Repsol SA, the operator of Libya's Sharara field, weren't immediately available for comment when contacted by phone yesterday. Production from the North African nation helped drive output from the Organization of Petroleum Exporting Countries to a 14-month high in October, the 12-member group said in a report on Oct. 10.