Crude Oil Rises a Third Day on Recovery in Global Fuel Demand

Oct. 12 (Bloomberg) -- Crude oil rose for a third day on speculation fuel demand will increase as the global economy emerges from recession.

Oil climbed after U.S. equity markets reached their highest in a year Oct. 9, fanning hope for a recovery in world energy consumption. An Investors Business Daily survey due tomorrow in the U.S., the world’s largest energy user, may show consumers were optimistic for a third month, according to economists surveyed by Bloomberg News.

“We are looking at an international economy that is going to be stronger in 12 months’ time,” said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. “There’s that conviction that things are going to be better down the track” even when some data is not “especially supportive,” he said.

Crude oil for November delivery climbed as much as 79 cents, or 1.1 percent, to $72.56 a barrel in electronic trading on the New York Mercantile Exchange. It was at $72.23 at 9:26 a.m. Singapore time. Futures have gained 62 percent this year.

Oil added 8 cents to $71.77 a barrel Oct. 9, the highest settlement since Sept. 18, after the International Energy Agency upgraded its 2010 demand forecast for a third month. Prices rose for a second week as the Standard & Poor’s 500 Index rallied and the Dollar Index slipped to a one-year low, bolstering the investment appeal of commodities.

‘Suitable’ Price

Oil prices between $60 and $80 a barrel are suitable for exporters and importers, Kuwaiti Oil Minister Sheikh Ahmad al- Abdullah al-Sabah told state-run news agency KUNA yesterday. Kuwait is a founding member of the Organization of Petroleum Exporting Countries, which pumps about 40 percent of the world’s crude.

“Oil, at the end of the day, is still in that $65 to $75 range,” said Moore at Commonwealth Bank of Australia. “Have we now got to a point where, to get back to the $80s or higher, you actually need tight markets?”

U.S. stockpiles of distillate fuel, including heating oil and diesel, are at their highest since January 1983, according to Energy Department data. Gasoline inventories climbed 2.94 million barrels to 214.4 million as refiners boosted output, the department said Oct. 7.

“Gasoline demand seems to have steadied, but the distillate demand still seems very weak,” Moore said. “It draws into question just how the U.S. economy is really going.”

Brent crude oil for November settlement rose as much as 56 cents, or 0.8 percent, to $70.56 a barrel on the London-based ICE Futures Europe exchange. It was at $70.48 a barrel at 9:27 a.m. in Singapore. The contract gained 0.3 percent to $70 a barrel Oct. 9, the highest settlement since Sept. 22.