Oil Little Changed Near 7-Month High After Rising on IEA Report

June 12 (Bloomberg) -- Crude oil traded near a seven-month high, poised for a fourth week of gains, after the International Energy Agency raised its global demand forecast.

The IEA, adviser to 28 nations, increased its consumption outlook for the first time since August amid signs the recession is bottoming out. Nouriel Roubini, the New York University professor who predicted the financial crisis, said crude will likely touch $100 a barrel next year.

“I think the overall picture is certainly stronger for longer and higher over the next couple of months,” said Peter McGuire, managing director of Commodity Warrants Australia Pty in Sydney. “I would say $80 to $81 would be the new target.”

Crude oil for July delivery fell 23 cents to $72.45 a barrel in after-hours trading on the New York Mercantile Exchange at 10:04 a.m. Sydney time. Yesterday, the contract rose $1.35, or 1.9 percent, to $72.68 a barrel, the highest settlement since Oct. 20. Oil is up 5.7 percent this week.

The Paris-based IEA increased its global estimate for daily oil demand by 120,000 barrels to 83.3 million barrels in its monthly report yesterday. The gain was driven by the U.S. and China. Consumption worldwide will contract by 2.9 percent from last year, the biggest drop since 1981, the adviser said.

The forecast change in demand was countered by expectations for higher output from outside the Organization of Petroleum Exporting Countries. The IEA raised its 2009 estimate for non- OPEC supply by 170,000 barrels a day from May’s report because of production growth in Russia and Colombia and improved North Sea performance.

‘Smart Money’

“The smart money has been in crude for probably the best part of six weeks and longer considering where it has risen since February,” McGuire said.

Oil also advanced yesterday as equities gained on lower jobless claims in the U.S. The Standard & Poor’s 500 Index rose to a seven-month high after the jobless and retail releases bolstered confidence that the economy is recovering. The S&P 500 increased 0.6 percent to 944.89, the highest since Nov. 5.

The number of Americans filing claims for unemployment insurance fell to 601,000, lower than economists had forecast. The number of jobless continuing to collect benefit payments rose to a record for the 19th consecutive time, to 6.82 million, the Labor Department report showed. Retail sales climbed in May for the first time in three months, a separate report showed yesterday.

The dollar declined against most of its major counterparts after the gain in U.S. retail sales and drop in initial jobless claims encouraged investors to buy higher-yielding assets such as commodities. The dollar traded at $1.4108 per euro at 8:07 a.m. in Tokyo, from $1.4108 yesterday in New York.

Commodities Gain

The Reuters/Jefferies CRB Index of 19 raw materials rose 2 percent to 266.17, the highest since Nov. 5.

Gasoline for July delivery dropped 0.74 cents to $2.0575 a gallon at 10:04 a.m. in Sydney. Yesterday, it gained 4.96 cents, or 2.5 percent, to end the session at $2.0649 a gallon in New York. It was the highest settlement since Oct. 3.

U.S. oil stockpiles dropped 4.38 million barrels to 361.6 million in the week ended June 5, the Energy Department said June 10. Analysts surveyed by Bloomberg News forecast supplies to rise by 100,000 barrels. Imports slipped 7 percent to 8.97 million barrels a day. Gasoline stockpiles fell for a seventh week.

Oil touched a record $147.27 a barrel on July 11 as investors purchased commodities as the dollar dropped and on concern that demand would outpace production.

China, the world’s second-biggest oil-consuming country, boosted net crude purchases to 3.9 million barrels a day in May, a 14-month high.

Brent crude for July delivery rose 99 cents, or 1.4 percent, to $71.79 yesterday on London’s ICE Futures Europe exchange, the highest settlement since Oct. 20.