Oil Gains a Second Day as European Bailout Prompts Stock Rally

May 11 (Bloomberg) -- Crude oil advanced for a second day after an almost $1 trillion loan plan by European policy makers to end the region’s sovereign-debt crisis caused global stocks to rally and signaled energy demand may strengthen.

Oil rose from a 12-week low yesterday after the European Union and the International Monetary Fund agreed to offer as much as 750 billion euros ($954 billion) to countries facing instability. Crude prices may return to $80 to $85 a barrel once the debt crisis is resolved, Algerian Energy Minister Chakib Khelil said yesterday at a meeting in Doha, Qatar.

“The selloff we had last week reflected concerns we’ve had about the European economy, and those have now receded amid the big bailout,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “It’s only logical we’d see a strong bounce.”

Crude oil for June delivery gained 45 cents, or 0.6 percent, to $77.25 a barrel, in electronic trading on the New York Mercantile Exchange at 9:10 a.m. Sydney time. Yesterday, the contract rose $1.69, or 2.3 percent, to settle at $76.80.

The MSCI World Index jumped 4.9 percent yesterday, while the Standard & Poor’s 500 Index gained 4.4 percent. The dollar declined against the euro, increasing the appeal of commodities as an alternative investment. The U.S. currency traded little changed at $1.2784 at 8:25 a.m. Sydney time, after falling 0.3 percent yesterday.

European Union finance chiefs met in a 14-hour session in Brussels to come up with the program of bond purchases designed to halt a sovereign-debt crisis that has threatened to shatter confidence in the euro. The European Central Bank said it will buy government and private debt.

China Growth

China, the world’s second-biggest energy consumer after the U.S., increased net imports of crude oil to a record in April as demand from factories rose and car sales climbed, preliminary data released by China’s General Administration of Customs showed yesterday.

Chinese net imports reached 20.98 million metric tons, or about 5.1 million barrels a day. The previous record was in December when net shipments climbed to 20.9 million tons. Imports in April rose to 21.17 million tons while exports were at 190,000 tons, according to yesterday’s figures.

U.S. oil inventories probably climbed 1.1 million barrels last week from 360.6 million barrels the week before, based on the median estimate in a Bloomberg News survey of 11 analysts before an Energy Department report tomorrow. It would be the 14th increase in 15 weeks.

Saudi Arabian Oil Co., the world’s largest state-owned oil company, will supply 100 percent of cargoes sold under long-term contracts in June, according to a survey of refinery officials in Japan, Taiwan and South Korea who asked not to be identified, citing confidentiality agreements with the Middle East producer.

Brent oil for June settlement on the London-based ICE Futures Europe exchange rose $1.85, or 2.4 percent, to $80.12 a barrel yesterday.