Oil Advances for a Fifth Day as Stocks Gain, Dollar Declines

July 21 (Bloomberg) -- Crude oil rose for a fifth day as equities climbed and the dollar dropped against the euro, bolstering the appeal of commodities.

Oil advanced along with the stock market after a gauge of economic indicators rose in June, signaling that the worst of the recession may be over. Japanese equities advanced as CIT Group Inc. agreed to a loan to stave off bankruptcy and Goldman Sachs Group Inc. lifted its estimate for the Standard & Poor’s 500 Index on improving earnings.

“The main support line for oil was the move up in equities,” said Mike Sander, an investment adviser with Sander Capital in Seattle. “Market optimism is clearly in the air with rallies in the major equities markets seen across the board.”

Crude oil for August delivery rose as much as 56 cents, or 0.9 percent, to $64.54 a barrel on the New York Mercantile Exchange. It was at $64.42 a barrel at 10:23 a.m. in Sydney. Yesterday, it gained 42 cents, or 0.7 percent, to $63.98, the highest settlement since July 6.

The August contract expires today. The more-active September contract increased 24 cents, or 0.4 percent, to $65.53 a barrel.

The Standard & Poor’s 500 Index rose 1.1 percent to its highest level since November, and the Dow Jones Industrial Average rallied 104.21 points to close at a six-month high.

The Nikkei 225 Stock Average rose 113.93, or 1.2 percent, to 9,509.25 as of 9:05 a.m. in Tokyo, a fifth-straight climb. The broader Topix index added 1.4 percent to 890.16. Japan’s markets were closed yesterday for a holiday.

Leading Indicators

“If earnings reports this week are better than expected, even if the company is losing money, markets could rally even further,” Sander said. “This will help support the price of oil and could push it higher.”

The Conference Board’s gauge of the economic outlook for the next three to six months increased 0.7 percent, more than forecast, after a revised 1.3 percent gain in May, the New York- based research group said yesterday. It is the first time the index has climbed for three consecutive months since 2004.

The U.S. currency traded at $1.4234 per euro at 6:09 a.m. in Tokyo, after falling 0.9 percent yesterday and reaching $1.4249, the weakest level since June 5.

Gasoline for August delivery rose 0.17 cents to $1.7911 a gallon at 10:12 a.m. Sydney time on the New York exchange. Yesterday, it gained 1.95 cents, or 1.1 percent, to settle at $1.7894, the highest since July 2.

China’s oil-processing volume rose for a fifth month to a record in June as faster economic growth boosted fuel demand and refining profits encouraged production, the Chinese government said last week. Processing climbed to 31.9 million metric tons, or about 7.76 million barrels a day.

Brent crude for September settlement gained 21 cents to $66.65 a barrel at 10:18 a.m. in Sydney on London’s ICE Futures Europe Exchange. Yesterday, it rose $1.06, or 1.6 percent, to end the session at $66.44 a barrel, the highest close since July 2.