Crude Oil Set for Weekly Gain on Economic Recovery Optimism

Aug. 21 (Bloomberg) -- Crude oil traded near $73 a barrel in New York, poised for a weekly gain on optimism the prospects for a global economic recovery have improved.

Oil prices were supported by a third day of gains by U.S. equities as American International Group Inc. said it expects to repay the government and data on manufacturing and economic indicators added to evidence the recession may be ending. Oil stockpiles dropped 8.4 million barrels last week, the most since May 2008, the Energy Department reported Aug. 19.

“The main factor that supported oil was the EIA report that showed a very large drawdown in U.S. crude inventories -- that has been the key factor,” said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. “There is still a sense that the markets are anticipating an international economic recovery.”

Crude oil for October delivery traded at $73.11 a barrel, up 20 cents, on the New York Mercantile Exchange at 9:29 a.m. Sydney time. Futures are up 6 percent this week. The September contract expired yesterday.

The Standard & Poor’s 500 Index rose 1.1 percent in New York and the Dow Jones Industrial Average jumped 70.89 points to 9,350.05. The dollar traded at $1.4257 per euro at 6:06 a.m. in Tokyo, after declining 0.2 percent yesterday in its third drop.

U.S. crude inventories dropped to 343.6 million barrels and gasoline supplies declined 2.18 million barrels, the Energy Department report showed.

Brent crude oil for October settlement fell $1.26, or 1.7 percent, to $73.33 a barrel on the London-based ICE Futures Europe exchange yesterday.