Futures were little changed after climbing 0.5 percent yesterday. U.S. manufacturing expanded “at a steady pace across the nation” the Federal Reserve said, while an index signaled factory output is rising in China. U.S. crude stockpiles increased almost four times more than forecast and OPEC’s oil output advanced to the highest level in more than three years.

“The economic data feeds into the demand picture for the U.S.,” Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty in Sydney, said in a telephone interview. “While it’s not boom time, it’s a lot more positive than the double-dip recession scenario we were looking at last year and should add to the firm tone of the oil market.”

Oil for April delivery was at $107.18 a barrel, up 11 cents in electronic trading on the New York Mercantile Exchange at 12:42 p.m. Sydney time. The contract yesterday rose 52 cents to $107.07, the highest close since Feb. 27. Prices advanced 8.7 percent last month and are 7.6 percent higher the past year.

Brent oil for April settlement increased 31 cents, or 0.3 percent, to $122.97 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to New York-traded West Texas intermediate was at $15.79. It reached a record of $27.88 on Oct. 14.

Supply Versus Demand

The U.S. economy expanded at a “modest to moderate pace” in January and February as factories increased production, the Federal Reserve said in its Beige Book business survey. A Chinese manufacturing index rose to 51.0 in February from 50.5 in January, the Beijing-based National Bureau of Statistics and the China Federation of Logistics and Purchasing said today. The U.S. and China are the world’s biggest oil consumers.

Crude output by the Organization of Petroleum Exporting Countries increased 255,000 barrels to an average 31.055 million barrels a day in February from a revised 30.8 million the prior month, according to a Bloomberg survey of oil companies, producers and analysts. Production was the highest since November 2008. Iranian output was the lowest in more than nine years.

Oil has risen this year as Western nations tighten sanctions on Iran over its nuclear program. Excluding Iran from the global crude market would increase the shortfall between worldwide supply and demand sixfold in calculations using February production and consumption estimates, the U.S. Energy Department said in a report yesterday. Global fuel use averaged 3 million barrels a day more than output when Iran is excluded and 500,000 more when it is included, the department said.

U.S. Stockpiles

Oil in New York dropped as much as 1.6 percent yesterday after the Energy Department saidcrude stockpiles rose 4.2 million barrels last week. They were forecast to climb 1.1 million, according to the median projection of 12 analysts in a Bloomberg News survey. Supplies at Cushing, Oklahoma, the delivery point for New York-traded oil, rose 1.6 million barrels to 33.8 million, the highest level since Aug. 5.

Gasoline supplies fell 1.6 million barrels last week, compared with a projected 425,000 barrel decline. Distillate inventories, a category that includes heating oil and diesel, slid 2.1 million barrels. They were forecast to drop 750,000 barrels.

The U.S. exported more gasoline, diesel and other fuels than it imported in 2011 for the first time since 1949, the Energy Department also said. Shipments abroad of petroleum products exceeded imports by 439,000 barrels a day, the department said in the Petroleum Supply Monthly report. Refiners exported record amounts of gasoline, heating oil and diesel to meet higher global fuel demand while U.S. fuel consumption sank.

To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at

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