Oil Little Changed After Rising on Dollar Drop, Gains in Stocks

Aug. 28 (Bloomberg) -- Crude oil was little changed near $73 a barrel after rising yesterday as equity gains lifted investor sentiment and the dollar weakened, boosting the appeal of commodities as a hedge against inflation.

Equities advanced as American International Group Inc. led U.S. financial stocks higher and Boeing said the 787 Dreamliner will make its first flight this year. Those gains helped oil rebound from as low as $69.83 yesterday.

“Oil broke down through the $70 mark, holding on briefly, before being pulled up by a resurgent equities market,” said Mike Sander, an investment adviser at Sander Capital in Seattle. “Boeing was the clear motivator in the Dow index.”

Crude oil for October delivery gained 10 cents to $72.59 a barrel on the New York Mercantile Exchange at 9:03 a.m. Sydney time. Yesterday, the contract rose $1.06, or 1.5 percent, to settle at $72.49. Futures are 2.3 percent lower for the week.

The Standard & Poor’s 500 Index added 2.86 points and the Dow Jones Industrial Average advanced 37.11 to 9,580.63, rallying for the eighth straight day. The euro traded at $1.4346 at 6:09 a.m. in Tokyo, following a 0.6 percent gain yesterday.

A report showing that the U.S. economy contracted less than anticipated in the second quarter amid a jump in government spending and smaller cutbacks by consumers also supported oil prices. The total number of people collecting unemployment insurance fell to the lowest level since April, in a sign that the economy is pulling out of the recession.

Brent crude for October rose 86 cents, or 1.2 percent, to $72.51 a barrel on the London ICE Futures Europe Exchange.