Dec. 23 (Bloomberg) -- Oil headed for its biggest weekly gain in almost two months in New York after U.S. economic reports indicated that growth in the world’s biggest crude consumer will accelerate.

West Texas Intermediate futures have advanced 6.8 percent this week, matching the gain in the period ended Oct. 28. U.S. initial jobless claims dropped to the lowest level since April 2008, data from the Labor Department showed yesterday. Leading indicators climbed more than forecast in November, and consumer sentiment improved this month. Oil supplies fell the most in a decade last week, the Energy Department said Dec. 21.

“We’re seeing improving data from the U.S., which I expect will be a little bit stronger next year,” said Torbjoern Kjus, an oil market analyst at DnB NOR ASA, who predicts prices will decline in the first quarter as Libya boosts output. “But Europe’s problems will escalate and more than offset this.”

Crude for February delivery was at $99.90 a barrel, up 37 cents, in electronic trading on the New York Mercantile Exchange at 1:32 p.m. London time. The contract yesterday rose 86 cents to $99.53, the highest settlement since Dec. 13. Futures climbed 9.4 percent this year after increasing 15 percent in 2010.

Brent oil for February was trading at $107.76 a barrel, 13 cents lower, on the London-based ICE Futures Europe exchange. The European contract’s premium to Nymex crude was $7.84 a barrel, compared with a close yesterday of $8.36 that was the smallest differential since March 8. The spread surged to a record $27.88 on Oct. 14.

U.S. Economy

U.S. initial unemployment claims fell by 4,000 to 364,000 last week, Labor Department figures showed yesterday. The Conference Board’s gauge of the outlook for the next three to six months rose 0.5 percent, versus a median forecast of 0.3 percent in a Bloomberg survey. The Thomson Reuters/University of Michigan final index of consumer sentiment increased more than expected in December.

Crude may rise next week on speculation that sanctions against Iran will curb supply from the world’s third-largest oil exporter, a separate Bloomberg survey showed.

Twelve of 32 analysts, or 38 percent, forecast oil will gain through Dec. 30. Ten respondents, or 31 percent, predicted prices will drop and 10 estimated there will be little change. Oil is up 26 percent this quarter, the biggest advance since the second quarter of 2009.

Iran Sanctions

The European Union and the U.S. are seeking support from the Middle East and Asia for sanctions to increase pressure on Iran to abandon a suspected nuclear weapons program. Iran’s navy will hold 10 days of maneuvers east of the Strait of Hormuz, state-run Fars news agency reported yesterday, citing Navy Commander Habibollah Sayari.

“If there are sanctions, that will be supportive,” said Jeremy Friesen, a commodity strategist at Societe Generale SA in Hong Kong. “If there is a response by Iran or if tensions escalate then that would be even more supportive.”

About 15.5 million barrels of oil a day, or a sixth of global consumption, flows through the waterway between Iran and Oman at the mouth of the Persian Gulf, according to the U.S. Department of Energy. Sayari said Iran’s military has the capability to “control” the strait, according to a second Fars report. Whether it chooses to close the channel “depends on the decision of Iran’s higher officials,” he said.

EU foreign ministers are scheduled to meet next month to discuss sanctions. Iran, which exports more crude than any nation except Saudi Arabia and Russia, denies trying to develop nuclear weapons.

Floor trading at the New York Mercantile Exchange is closed Dec. 26 because of the Christmas holiday. Electronic trading begins at 6 p.m. on Dec. 26 for the next day’s settlement price.

--Editors: Rachel Graham, Alessandro Vitelli

To contact the reporter on this story: Ramsey Al-Rikabi in Singapore at ralrikabi@bloomberg.net Grant Smith in London at gsmith52@bloomberg.net

To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net