Oil Rises After Industry Report Shows Drop in U.S. Inventories

Aug. 5 (Bloomberg) -- Oil rose after an industry-funded report showed a decline in crude inventories in the U.S., the world’s biggest energy consumer, and equities gained for a fourth day.

The American Petroleum Institute said supplies fell 1.52 million barrels last week. An Energy Department report today will probably show stockpiles rose 600,000 barrels, according to analysts surveyed by Bloomberg News. Oil-supply totals from the API and DOE moved in the same direction 76 percent of the time over the past four years, Bloomberg data shows.

“The API numbers seemed to provide a little bit of mild strength to prices,” Toby Hassall, a research analyst at Commodity Warrants Australia Pty in Sydney, said by phone. “This rally has been sentiment driven and it is largely dependent on equities maintaining momentum if oil is going to make new highs for 2009.”

Crude oil for September delivery rose as much as 45 cents, or 0.6 percent, to $71.87 a barrel on the New York Mercantile Exchange, and was at $71.63 at 10:10 a.m. in Sydney. Yesterday, oil dropped 16 cents, or 0.2 percent, to settle at $71.42.

U.S. stocks rose after pending sales of existing homes increased more than forecast in June. The Standard & Poor’s 500 Index added 0.3 percent to 1,005.65. The Dow Jones Industrial Average climbed 0.4 percent to 9,320.19, and the Nasdaq Composite Index advanced 0.1 percent to 2,011.31.

Oil also gained as the U.S. currency weakened. The dollar traded at $1.4396 per euro at 7:45 a.m. in Tokyo, from $1.4408 in New York yesterday. A drop in the U.S. currency bolsters the appeal of commodities as a hedge against inflation.

Gasoline Supplies

Gasoline inventories increased 2.1 million barrels to 215.7 million in the week ended July 31, the API report showed. Crude stockpiles declined to 350.9 million, the report said. The Energy Department is scheduled to release its weekly report today at 10:30 a.m. in Washington.

The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.

Gasoline for September delivery fell 0.64 cents, or 0.3 percent, to $2.0503 a gallon in New York at 8:59 a.m. Sydney time. Yesterday, it declined 1.26 cents, or 0.6 percent, to end the session at $2.0567.

Brent crude oil for September settlement rose 37 cents, or 0.5 percent, to $74.65 a barrel on London’s ICE Futures Europe Exchange at 10:13 a.m. in Sydney. Yesterday, the contract rose 73 cents, or 1 percent, to $74.28.