Crude oil rose for a third day on speculation fuel demand will increase as the global economy recovers from its deepest recession since World War II.
Oil gained as an Investors Business Daily survey due tomorrow in the U.S., the world’s largest oil user, may show consumers were optimistic for a third month, according to economists surveyed by Bloomberg. Prices between $60 and $80 a barrel are suitable for exporters and importers, Kuwaiti Oil Minister Sheikh Ahmad al-Abdullah al-Sabah told state-run news agency KUNA yesterday.
“We are looking at an international economy that is going to be stronger in 12 months’ time,” said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. “There’s that conviction that things are going to be better down the track” even when some data is not “especially supportive,” he said.
Crude oil for November delivery climbed as much as 79 cents, or 1.1 percent, to $72.56 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $72.47 at 7:35 a.m. Singapore time.
The contract climbed 8 cents to $71.77 on Oct. 9, the highest settlement since Sept. 18, after the International Energy Agency increased its 2010 demand forecast for a third month. Prices climbed 2.6 percent last week as U.S. equities reached a two-week high and the Dollar Index dipped to a one- year low, increasing the investment appeal of physical assets.
U.S. Inventories
Oil futures reached a record $147.27 a barrel in July 2008 on concern global demand growth was outpacing the industry’s ability to bring new supplies to market.
Prices, having tumbled with last year’s financial market collapse, reached a 10-month high of $75 on Aug. 25 as the dollar tumbled and equities rose.
“Oil, at the end of the day, is still in that $65 to $75 range,” Commonwealth’s Moore said. “Have we now got to a point where, to get back to the $80s or higher, you actually need tight markets?”
U.S. distillate supplies, including heating oil and diesel, are at their highest since January 1983, according to Energy Department data. Gasoline inventories climbed 2.94 million barrels to 214.4 million as refiners increased output, the department said Oct. 7.
“Gasoline demand seems to have steadied, but the distillate demand still seems very weak,” Moore said. “It draws into question just how the U.S. economy is really going.”
Brent crude oil for November settlement rose as much as 51 cents, or 0.7 percent, to $70.51 a barrel on the London-based ICE Futures Europe exchange. The contract gained 0.3 percent to $70 a barrel on Oct. 9.