Crude Oil Trades Near $79 After Rising as U.S. Equities Gain

Jan. 20 (Bloomberg) -- Crude oil traded near $79 a barrel in New York after rising for the first time in six days as U.S. equities climbed amid improved economic prospects for the world’s biggest energy consumer.

Oil advanced as the Standard & Poor’s 500 Index gained the most in two weeks in New York yesterday, helped by optimism about technology company earnings. Prices climbed even as the dollar strengthened against the euro, limiting investors’ need for assets such as commodities to hedge against inflation.

“All the indications are saying that the price should go lower, so it’s a very interesting move,” said Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney. “Oil really did trade by itself. The U.S. dollar was mildly firmer, gold was relatively steady and a lot of the other commodities were off.”

Crude oil for February delivery traded at $78.83 a barrel, down 19 cents, on the New York Mercantile Exchange at 10:45 a.m. Sydney time. February futures expire today. The more-active March contract traded at $79.19, down 13 cents.

Yesterday, the February contract gained $1.02, or 1.3 percent, to settle at $79.02 a barrel. Trades were combined with those from Jan. 18 because of the Martin Luther King Jr. holiday in the U.S.

The Standard & Poor’s 500 Index gained 1.3 percent yesterday. An index of health-care companies in the S&P 500 led the advance with a 1.8 percent rally on speculation Republicans will block an industry overhaul if they win a Senate seat.

Massachusetts Vote

Defeat in Massachusetts, where polls are due to close at 8 p.m. local time, could cost Democrats a 60-vote Senate supermajority needed to help pass a health-care overhaul.

An Energy Department report tomorrow will probably show that crude oil stockpiles climbed 2.5 million barrels last week, according to the median of 11 analyst responses in a Bloomberg News survey. Gasoline supplies probably increased 2 million barrels, the survey showed.

Futures dropped 5.7 percent last week, the first weekly decline in five, after U.S. fuel supplies rose. Oil surged to $83.95 a barrel on Jan. 11 as cold weather in the eastern U.S. bolstered consumption of heating fuels and the dollar declined against the euro.

The Organization of Petroleum Exporting Countries raised its forecast for global oil demand this year by 20,000 barrels to 85.15 million barrels a day. Consumption will expand 820,000 barrels a day, or 1 percent, from 2009, according to the monthly report from OPEC’s Vienna-based secretariat released yesterday.

Brent crude oil for March settlement rose 53 cents, or 0.7 percent, to end the session at $77.63 a barrel on the London- based ICE Futures Europe exchange yesterday.