Crude Oil Reaches 1-Year High on Economic Optimism, Weak Dollar

Oct. 15 (Bloomberg) -- Crude oil reached a one-year high in New York on optimism fuel demand will increase amid improved prospects for an economic recovery in the U.S., the world’s biggest energy consumer.

Oil rose for a sixth day as the dollar declined and equities advanced around the world. Crude imports by China were 15 percent higher in September than a year earlier, according to a government report. Prices also climbed after a report from the American Petroleum Institute showed a decline in oil and gasoline stockpiles in the U.S. last week.

“The U.S. dollar knows only one direction and that is helping the oil price,” said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. “It may have also got a boost from the API data.”

Crude oil for November delivery gained 56 cents, or 0.7 percent, to $75.74 a barrel in electronic trading on the New York Mercantile Exchange at 10:45 a.m. Sydney time after earlier touching $75.90, the highest intraday price since Oct. 15, 2008. Yesterday, the contract rose $1.03 to $75.18, the highest close since Oct. 14, 2008. Prices are up 69 percent this year.

Stocks advanced, sending the Dow Jones Industrial Average above 10,000 for the first time in a year on better-than- estimated earnings at JPMorgan Chase & Co. and Intel Corp. The Dow jumped 144.8 points, or 1.5 percent, to 10,015.86, the highest level since Oct. 3, 2008.

Australia’s benchmark S&P/ASX 200 Index rose 1 percent to 4881.50 points at 10:21 a.m. Sydney time.

Falling Dollar

The U.S. currency traded at $1.4933 per euro at 10:20 a.m. in Sydney, after depreciating 0.5 percent yesterday and reaching $1.4947, the weakest since August 2008. A weaker dollar increases the appeal of commodities as an alternative investment.

U.S. stockpiles of crude oil fell 172,000 barrels to 339.2 million last week, according to a report from the American Petroleum Institute. Gasoline inventories declined 2.66 million barrels, the report showed.

The Energy Department will probably report that crude-oil inventories rose by 1 million barrels in the week ended Oct. 9, according to the median of estimates from 13 analysts polled by Bloomberg News. Gasoline stockpiles probably climbed 1.13 million barrels, the survey showed.

Oil-supply totals from the API and DOE moved in the same direction 76 percent of the time over the past four years, according to data compiled by Bloomberg.

The Energy Department will release its weekly report today in Washington, a day later than usual because of the Columbus Day holiday on Oct. 12.

China Imports

China’s crude-oil imports climbed 15 percent to 17.2 million tons last month from a year earlier, while exports reached 390,000 tons, according to the customs bureau. Imports gained 8.2 percent to 146 million tons in the first nine months.

“China’s import data for commodities was strong,” Moore said. “People are also revising up their demand forecasts and I think that is another supportive factor for the oil price.”

The Organization of Petroleum Exporting Countries raised its 2010 global demand forecast Oct. 13 on expansion in emerging economies. The 12-member group predicted consumption next year will rise 0.8 percent to 84.93 million barrels a day. The International Energy Agency and U.S. Energy Department increased their demand projections this month.

Brent crude oil for November settlement rose 70 cents, or 1 percent, to end the session at $73.10 a barrel on the London- based ICE Futures Europe exchange yesterday. It was the highest close since Aug. 24.