Crude Oil Snaps Five Days of Declines After Dropping Below $70

May 18 (Bloomberg) -- Crude oil rose, snapping five days of declines, as some investors took the view a drop below $70 a barrel made the commodity attractive to buy.

Oil pared yesterday’s 2.1 percent drop as the euro’s rebound from a four-year low bolstered optimism the shared European currency will weather the region’s debt crisis. A U.S. Energy Department report tomorrow will probably show that refinery operating rates increased and gasoline inventories dropped, according to a Bloomberg News survey.

“We’ve come from having oil at $87 a barrel to around $70 per barrel,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “Those who have already factored in a weak outlook for the euro zone, or don’t think that there’s the risk of another financial crisis happening, seem to think this is not such a bad time to buy.”

Crude oil for June delivery gained as much as 64 cents, or 0.9 percent, to $70.72 a barrel in electronic trading on the New York Mercantile Exchange, and was at $70.38 at 9:02 a.m. Singapore time. Yesterday, the contract fell $1.53 to $70.08 a barrel, the lowest settlement since Dec. 14. Prices had tumbled to $69.27 yesterday.

The dollar was at $1.2357 per euro from $1.2395 in New York. The euro weakened before a report forecast German investor confidence fell in May, after rising yesterday.

Refineries probably operated at 88.6 percent of capacity last week, up 0.2 percentage point from the previous week, according to the median of analyst responses before the Energy Department report.

“Refinery operations have been reasonably good,” National Australia Bank’s Westmore said.

Gasoline supplies declined 1 million barrels from 222.1 million the prior week, according to the Bloomberg survey. U.S. crude oil stockpiles probably increased by 625,000 barrels, the 15th time in 16 weeks as imports climbed.

Brent crude oil for July delivery increased as much as 80 cents, or 1.1 percent, to $75.90 a barrel, on the London-based ICE Futures Europe exchange, and was at $75.71 at 8:31 a.m. Singapore time. Yesterday, the contract slipped $2.83, or 3.6 percent, to $75.10.