Oil Rises as Gains in Equities Futures Signal Demand May Climb

April 7 (Bloomberg) -- Crude oil rose as U.S. and Asian equity futures gained, signaling that some investors expect economies to stabilize, boosting demand for energy.

Oil rose as much as 0.7 percent as the Standard & Poor’s 500 June futures and Nikkei 225 June futures advanced. U.S. stocks fell for the first time in five days yesterday, pulling oil prices lower, after Mike Mayo, an analyst at Calyon Securities USA Inc., advised selling bank shares.

“The equity markets are climbing back and are up after hours, and the Asian markets are trading quite a bit higher,” said Tom Hartmann, a commodity analyst at AltaVest Worldwide Trading Inc. in Mission Viejo, California.

Crude oil for May delivery gained 28 cents, or 0.6 percent, to $51.33 a barrel at 8:18 a.m. Sydney time on the New York Mercantile Exchange. Oil has risen 15 percent this year and is down 65 percent from a record in July. Yesterday, crude dropped $1.46, or 2.8 percent, to settle at $51.05 a barrel.

The S&P futures rose 0.3 percent to 832.90, and the Nikkei futures added 0.3 percent to 8,920.

The Standard & Poor’s 500 Index declined 0.8 percent yesterday to 835.48. It rose 3.3 percent last week, in its fourth consecutive weekly rally.

Mayo, a former Deutsche Bank AG analyst who gained a reputation for independence, said yesterday that government measures to shore up banks may not help as much as expected and loan losses will exceed levels from the Great Depression.

“There’s a lot of nervousness about the equity market,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York. “Until we see declining inventories, there won’t be a sustained gain in the oil price.”

Rising Supplies

Crude-oil inventories in the U.S., the world’s largest energy-consuming nation, rose to 359.4 million barrels in the week ended March 27, a 15-year high. Supplies probably rose 1 million barrels last week, according to a Bloomberg News survey of nine analysts.

The International Energy Agency will probably lower its global demand forecast this week, given slowing world growth, Executive Director Nobuo Tanaka said April 2.

“We’ve probably hit the upper range of prices for the near term,” AltaVest’s Hartmann said. “There’s too much supply out there. There’s some hope that maybe a little bit of demand is coming back there, but OPEC and other producers aren’t able to get a good grip on cutting back the flow of oil.”

Qatari Oil Minister Abdullah bin Hamad al-Attiyah said yesterday he doesn’t expect prices to rebound to $70 a barrel this year as OPEC implements its biggest-ever supply reduction.

$50 Is ‘Enough’

“Fifty dollars a barrel is reasonable for the world economy now,” Qatar’s al-Attiyah said.

Crude oil at $50 a barrel is also “enough” for Venezuela, the country’s president, Hugo Chavez, said on state television after floor trading closed yesterday. Qatar is OPEC’s second- smallest oil producer after Ecuador. Venezuela is its sixth largest, after Saudi Arabia, Iran, Iraq, the United Arab Emirates and Kuwait.

Brent crude oil for May settlement dropped $1.23, or 2.3 percent, yesterday to $52.24 a barrel on London’s ICE Futures Europe exchange.

The Brent contract was $1.19 a barrel more expensive than May crude traded on the Nymex, based on yesterday’s prices. That’s the most since Feb. 17. Brent oil is often priced at a discount to Nymex crude and traded lower for most of March.