Oil Poised for Biggest Weekly Gain in Six as Supplies Decline

July 9 (Bloomberg) -- Oil rose, poised for its biggest weekly gain in six, as U.S. crude inventories fell after Hurricane Alex disrupted Gulf of Mexico output and deliveries, and a drop in jobless claims prompted optimism on the economy.

Oil rose for a third day after the Energy Department said crude supplies dropped the most since September. U.S. retailers yesterday reported sales gains in June, while the International Monetary Fund raised its forecast for global growth this year on July 7, reflecting a stronger-than-expected first half.

“There’s optimism out there,” said Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney. “Oil is benefiting from the IMF report and retail numbers. The draws in stockpiles were encouraging. I expect prices to move up to $80, but we still need more signs of recovery.”

Crude oil for August delivery gained as much as 46 cents, or 0.6 percent, to $75.90 in electronic trading on the New York Mercantile Exchange. It was at $75.78 at 9:40 a.m. in Sydney. Yesterday, the contract rose $1.37, or 1.9 percent, to $75.44, the highest settlement since June 30.

Oil is poised for a gain of 5 percent for the week, the biggest increase since May 28. Futures have climbed 25 percent from a year ago.

U.S. crude oil supplies fell 4.96 million barrels to 358.2 million, the Energy Department said. Total U.S. fuel consumption increased 3.2 percent to 19.6 million barrels a day, the highest level since the week ended May 28, the department said in a weekly report.

Jobless Claims

Alex, the earliest hurricane of the Atlantic season since 1995, made landfall in northeastern Mexico June 30. Almost 421,000 barrels of daily oil output, or 26 percent of Gulf of Mexico production, was shut-in on the day the storm hit shore.

The number of Americans applying for jobless benefits last week fell 21,000 in the week ended July 3 to 454,000, a level that indicates improvement in the labor market is taking time to develop. Economists had forecast jobless applications would decline to 460,000 from an initially reported 472,000 for the prior week, according to the median of 36 projections in a Bloomberg survey.

U.S. retailers reported sales gains in June as record-high temperatures on the East Coast pushed more shoppers into air- conditioned malls.

German industrial production climbed in May as the global recovery fueled demand for goods from Europe’s largest economy. Production rose 2.6 percent from April, when it gained a revised 1.2 percent, the Economy Ministry said. Economists had forecast a 0.9 percent gain, according to a Bloomberg News survey.

The world economy will expand 4.6 percent in 2010, the biggest gain since 2007, compared with an April projection of 4.2 percent, the Washington-based IMF said in revisions to its World Economic Outlook.

Brent crude for August delivery climbed $1.20, or 1.6 percent, to settle at $74.71 a barrel on the London-based ICE Futures Europe exchange yesterday.