Oil Trades Above $81 After Rising With Equities on Optimism Over Economy

Crude oil was little changed above $81 a barrel in New York after rising for the first time in four days as advancing equity markets buoyed confidence that the economic rebound will spur fuel demand.

Oil rose 1 percent yesterday as the MSCI World Index of equities in 24 developed nations climbed to a 12-week high amid speculation slower U.S. jobs growth will prompt the Federal Reserve to extend efforts to strengthen the economy. U.S. crude stockpiles probably declined last week, according to a Bloomberg News survey before an Energy Department report tomorrow.

“Sentiment in the oil market is very mixed,” Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney, said by telephone. “We’re stuck in a range. If oil takes out $82.50, it’ll be a different ball game. It may test $85.”

Crude oil for September delivery was at $81.49 a barrel, up 1 cent, in electronic trading on the New York Mercantile Exchange at 10:59 a.m. Sydney time. Yesterday, the contract rose 78 cents to settle at $81.48. Futures have climbed 16 percent in the past year.

The MSCI index advanced 0.5 percent in New York, the Standard & Poor’s 500 Index gained 0.6 percent and the Dow Jones Industrial Average increased 0.4 percent. The Federal Open Market Committee meets today.

A report that U.S. companies hired fewer workers than forecast last month intensified a debate among economists over whether Fed policy makers will take an incremental step toward providing more stimulus.

Crude Inventories

Crude stockpiles in the U.S. probably declined 2 million barrels last week, according to the Bloomberg survey. Refineries probably ran at 90.7 percent, down 0.5 percentage point from the prior week, the survey showed.

The Energy Department is scheduled to release its weekly report at 10:30 a.m. tomorrow in Washington.

Global refining margins, or the profit from turning crude oil into fuels such as gasoline and diesel, averaged $4.58 a barrel from July 1 to Aug. 5, down 17 percent from a second- quarter average of $5.49 a barrel, according to data published yesterday by BP Plc.

The margin along the U.S. Gulf Coast, home to 43 percent of the country’s refining capacity, was $4.84 a barrel, down 27 percent from the second-quarter average, according to BP’s Global Indicator Margin. Lower refinery margins reduce the incentive to buy and process oil into gasoline and other fuels.

Brent crude oil for September settlement traded at $81.05 a barrel, up 6 cents, on the London-based ICE Futures Europe exchange at 11:03 a.m. Sydney time. Yesterday, the contract rose 83 cents, or 1 percent, to settle at $80.99.