Oil Rises a Third Day as Recovery Optimism Sparks Equities Gain

Sept. 29 (Bloomberg) -- Crude oil advanced for a third day in New York on optimism about the prospects for an economic recovery in the U.S., the world’s biggest energy consumer.

Oil extended gains after U.S. equities increased the most in five weeks yesterday as takeovers in the drug and technology industries added to evidence that mergers and acquisitions are rebounding from the slowest pace in six years. Japanese and Australian stock futures rose today after Asian equities posted their longest stretch of declines in almost three months.

“Oil received price support from the rally in equities,” said Mike Sander, an investment adviser at Sander Capital in Seattle. “For oil to trade lower in price we are going to have to see the euro drop in value,” reducing the appeal of commodities as an inflation hedge, he said.

Crude oil for November delivery gained 45 cents, or 0.7 percent, to $67.29 a barrel in electronic trading on the New York Mercantile Exchange at 9:49 a.m. Sydney time. Yesterday, the contract rose 82 cents, or 1.2 percent, to settle at $66.84. Prices have gained 50 percent since the start of the year.

The Standard & Poor’s 500 Index added 1.8 percent to 1,062.98 in New York yesterday, snapping a three-day losing streak. The Dow Jones Industrial Average gained 124.17 points, or 1.3 percent, to 9,789.36.

The Nikkei 225 Stock Average added 0.8 percent to 10,087.61 as of 9:04 a.m. in Tokyo. Australia’s benchmark stock index, the S&P/ASX 200 Index, rose 0.62 percent at 10:05 a.m. in Sydney.

Cold Winter

The dollar traded at $1.4630 per euro at 8:30 a.m. in Tokyo, from $1.4622 yesterday.

The U.S. northeast, the country’s largest market for heating oil, may have the coldest winter in a decade because of a weak El Nino, a warming current in the Pacific Ocean, according to Matt Rogers, a forecaster at Commodity Weather Group, in a Bloomberg Television interview from Washington.

Still, ample U.S. oil supplies may curb gains in prices. Stockpiles are 9 percent higher than the five-year average for this time of year. An energy department report due tomorrow will probably show inventories rose 1.5 million barrels last week, based on the median estimate of eight analysts surveyed by Bloomberg News. Forecasts ranged from a 2.56 million barrel gain to a decrease of 2.5 million barrels.

Brent crude oil for November settlement gained 36 cents, or 0.6 percent, to $65.90 a barrel on the London-based ICE Futures Europe exchange at 10:13 a.m. Sydney time. Yesterday, the contract gained 43 cents, or 0.7 percent, to $65.54.