By Mark Shenk
Dec. 26 (Bloomberg) -- Crude oil rose to a one-month high in New York as a government report tomorrow may show a U.S. inventory decline, and as Turkish planes bombed suspected Kurdish sites in northern Iraq.
Oil supplies probably dropped 1.63 million barrels in the week ended Dec. 21, according to the median of 10 responses in a Bloomberg News survey of analysts. The Turkish strikes were the latest in a series of cross-border attacks on the outlawed Kurdistan Workers Party, or PKK.
``We're looking for the sixth straight weekly'' drop in oil supplies, said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. ``The Turkish attacks are factored in but this isn't a new problem and it has had no impact on the oil flow.''
Crude oil for February delivery rose $1.84, or 2 percent, to settle at $95.97 a barrel at 2:47 p.m. on the New York Mercantile Exchange. It was the highest close since Nov. 26. Futures touched a record $99.29 on Nov. 21 and are up 57 percent from a year ago.
``We're going to see traders push prices back towards $100 during the next few days,'' said Justin Fohsz, a broker at Starsupply Petroleum, a division of GFI Group Inc., in Englewood, New Jersey. ``The market will continue to move around a lot because trading is so light.''
Trading has been lower than usual because of the end-of- year holidays. Nymex oil traders exchanged 81,634 contracts on Dec. 24, down 82 percent from a week earlier, according to data compiled by Bloomberg.
``The main thing today is that this is a thin, volatile market,'' Armstrong said. ``If someone wants to push this market, they clearly can.''
The Energy Department is scheduled to release its weekly report on inventories tomorrow at 10:30 a.m. in Washington, a day later than usual because of Christmas.
Today's bombing raid was at least the third air operation in Iraq this month. Troops were briefly sent across the border on Dec. 17, according to the army. Turkey says it is using intelligence from the U.S. to target the PKK.
Iraq has the world's third-largest crude-oil reserves. The country's northern region is controlled by a semi-autonomous Kurdish administration. Kirkuk, at the center of the region's biggest oil field, is about 100 miles (161 kilometers) from the Turkish border.
Exports from northern Iraqi fields, which run by pipeline to Turkey's Ceyhan export terminal on the Mediterranean Sea, averaged 400,000 barrels a day last month.
``The ongoing Turkish air attacks are an excuse to push prices to the upside,'' said Tim Evans, an energy analyst at Citigroup Global Markets Inc. in New York. ``It's debatable whether this will have any effect on Iraqi shipments.''
Crude-oil prices also rose because the U.S. dollar fell against the euro, which bolstered the appeal of commodities as a hedge against inflation. Weak Christmas retail sales in the U.S. indicate consumers are starting to feel pressured by the slowdown in the housing market. The U.S. uses about 25 percent of the world's oil.
Brent crude for February settlement rose $1.24, or 1.3 percent, to close at $93.94 a barrel on London's ICE Futures Europe exchange. It was the highest close since Dec. 12.