Oil declined after a government report showed that U.S. crude and fuel inventories surged as production advanced to a 19-year high.

Futures fell after the Department of Energy said crude stockpiles rose 1.31 million barrels to 361.3 million last week. A 2 million-barrel gain was the median estimate of analysts surveyed by Bloomberg. Gasoline and distillate inventories also rose. Crude output climbed to 7 million barrels a day, the most since 1993. The U.S. will pump an average 7.93 million barrels a day next year, the department said yesterday.

Increasing output in the U.S. and Canada has bolstered supplies at Cushing, Oklahoma, the delivery point for WTI. Stockpiles at the hub rose 332,000 barrels to a record 50.1 million in the seven days ended Jan. 4.

Crude imports rose 18 percent to 8.34 million barrels a day, the first gain in four weeks. Fuel imports increased 7.8 percent to 2.09 million barrels a day last week.

Gasoline inventories climbed 7.41 million barrels to 233.1 million, versus an expected gain of 2.5 million. Distillate inventories increased 6.78 million barrels to 130.7 million, versus a forecast advance of 1.9 million.

Refineries operated at 89.1 percent of capacity last week, the report showed, down from 90.4 percent the previous week.

The Energy Department raised its oil-price projections for 2013 yesterday and forecast that global consumption will expand to a record. WTI will average $89.54 a barrel, up 1.3 percent from the December estimate of $88.38, it said in the monthly Short-Term Energy Outlook. The U.S. benchmark averaged $94.12 in 2012, less than the December estimate of $94.26.

Crude oil for February delivery fell to $92.68 a barrel on the New York Mercantile Exchange. The contract traded at $93.45 before the release of the inventory report at 10:30 a.m. in Washington. Prices dropped 7.1 percent in 2012, the first decline in four years.

Brent oil for February settlement slipped 58 cents, or 0.5 percent, to $111.36 a barrel on the London-based ICE Futures Europe exchange. The North Sea crude traded at an $18.44 premium to the U.S. benchmark, West Texas Intermediate. The premium has narrowed from $25.53 on Nov. 15.

Gold prices traded in a narrow range as investors await the outcome of the meetings of central banks of the euro area and Japan.

Last week, gold has fallen in price to a minimum of more than four months below $ 1.630 an ounce, as investors spooked minutes of the last meeting of the Federal Reserve, who showed concern about the side effects of "quantitative easing."

In 2012, gold has risen in price the 12th consecutive year by the central banks of the U.S. stimulus package and Europe. According to analysts, the Bank of Japan in January will consider further easing of policy, and the European Central Bank will not change interest rates at a meeting on Thursday.

Support prices may have increased demand in the physical market of Asia, especially in the largest consumer of gold - China and India. Premiums for delivery to India on Tuesday rose to its highest level in two months, as traders rush to place orders before the expected increase in import duties.

Yesterday, at the beginning of today's session, the price of gold prices rose amid signs that the buyers in China are increasing their investment in the precious metal on the eve of the Lunar New Year.

The amount of physical gold traded on the Shanghai gold market (Shanghai Gold Exchange), the main venue for trading this metal in China, jumped to record high this week. Trading volume on Monday exceeded 19,500 pounds, which is more than three times higher than the average of previous 30 sessions, according to the site SGE.

This was proof that the Chinese buyers took advantage has declined in recent years prices for gold purchases before the holidays. In addition, imports of gold to mainland China from Hong Kong reached a 7-month high in November, said the bank. This data is mostly considered an indicator of changes in demand for gold in the country. November data are the latest available at the moment.

Gold prices were down for the sixth session in a row, falling over this time by 6%. Growth of quotations of futures on Tuesday broke the 3-day price drop.

Buyers in China, tend to increase portfolios before the Lunar New Year, the celebration which will begin on February 10 and will continue for a week, during which markets will be closed.

February futures price of gold on COMEX today rose to 1666.00 dollars an ounce, and then decreased to the level of 1653.70 dollars per ounce.

Change % Change Last

Gold 1,659 +13 +0.77%

00:00Australia HIA New Home Sales, m/mNovember +3.4%+4.7%

00:30Australia Retail sales (MoM)November 0.0%+0.3%-0.1%

00:30Australia Retail Sales Y/YNovember +3.1%

02:00China Trade Balance, blnDecember 19.620.1

02:00China New LoansDecember 523550

09:30United Kingdom Trade in goodsNovember -9.5-9.0

10:00Eurozone GDP (QoQ)(finally)Quarter III -0.1%-0.1%

10:00Eurozone GDP (YoY)(finally)Quarter III -0.6%

11:00Germany Industrial Production s.a. (MoM)November -2.6%+1.1%

11:00Germany Industrial Production (YoY)November -3.7%-2.9%

13:15Canada Housing StartsDecember 196198

15:30U.S. Crude Oil Inventories- -11.1

18:00U.S. USA 10-y Bond Auction-