Oil Rises for a Fifth Day as Demand Forecast Is Revised Higher

Oct. 14 (Bloomberg) -- Crude oil rose for a fifth day in New York after a forecast increase in world energy demand, and as the dollar weakened against the euro, increasing the appeal of commodities as an alternative investment.

Oil gained 1.2 percent yesterday as the Organization of Petroleum Exporting Countries increased its 2010 global oil- consumption forecast on economic expansion in emerging economies. Crude also climbed as the dollar fell to the lowest level against the euro since August 2008.

“Prices are higher in anticipation of higher demand,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “We have yet to see demand recover, but as long as there are upward revisions of future demand, there will be support for prices.”

Crude oil for November delivery gained 75 cents, or 1 percent, to $74.90 a barrel in electronic trading on the New York Mercantile Exchange at 9:18 a.m. Sydney time. Yesterday, the contract rose 88 cents to $74.15, the highest settlement since Aug. 24. Prices are up 68 percent this year.

Total crude consumption will increase by 700,000 barrels a day to 84.93 million barrels a day next year, led by demand from emerging markets, OPEC said in a monthly report yesterday. This year, the group forecasts demand will contract by 1.4 million barrels a day to 84.24 million barrels a day.

The dollar traded at $1.4855 per euro at 9:06 a.m. in Sydney, after depreciating 0.5 percent yesterday and reaching $1.4876, the weakest level since Aug. 22, 2008.

Crude Supplies

An Energy Department report is forecast to show that U.S. crude-oil and gasoline inventories increased last week according to a Bloomberg News survey. The department is scheduled to release its Weekly Petroleum Status Report Oct. 15 at 11 a.m. in Washington, a day later than usual because of yesterday’s Columbus Day holiday.

The Standard & Poor’s 500 Index lost 0.3 percent to 1,073.19 in New York yesterday after rising for the previous six days, its longest streak of gains since June 2007. The Dow Jones Industrial Average fell 0.2 percent.

Brent crude oil for November settlement gained $1.04, or 1.5 percent, to end the session at $72.40 a barrel on the London-based ICE Futures Europe exchange yesterday. Futures settled at the highest level since Aug. 28.