June 19 (Bloomberg) -- Crude oil rose for a third day after Nigerian militants targeted an Agip pipeline, while speculation grew that fuel demand will increase as the global economy recovers.

The Movement for the Emancipation of the Niger Delta, or MEND, said it blew up an Agip link that delivers crude to the Brass export terminal. The index of U.S. leading economic indicators rose for a second month and European Union leaders said the region is on course for a “sustainable” economic recovery. Protests in Iran over the result of last week’s election entered a seventh day.

“Missing flows from Nigeria are starting to add,” said Olivier Jakob, managing director of Petromatrix GmbH in Zug, Swizerland. “We will need to keep an Iranian risk premium for the weekend and to it we will add a Nigerian risk premium.”

Crude oil for July delivery rose as much as 93 cents, or 1.3 percent, to $72.30 a barrel in electronic trading on the New York Mercantile Exchange, trading for $72.07 at 12:55 p.m. London time.

Prices have risen 60 percent this year and reached a seven- month high of $73.23 on June 11. The July contract expires June 22. The more-active August contract was at $72.63 a barrel, up 72 cents.

Petroleum products demand in the U.S., the world’s largest energy user, fell 6 percent in the four weeks to June 12 from a year earlier, the Energy Department said June 17.

Winding Down?

The leading index advanced 1.2 percent after a 1.1 percent gain in April, the best back-to-back performances since November and December of 2001, the New York-based Conference Board reported yesterday. The Labor Department said the number of Americans receiving jobless benefits dropped for the first time since January.

“The readings all provided further evidence that the U.S. recession seems to be winding down,” said Edward Meir, an analyst at MF Global Ltd. in Connecticut. “Energy prices will retain their firm tone heading into the weekend, especially given the unsettled situation in Iran.”

The EU is showing signs of a “sustainable economic recovery” from the worst slump since World War II, leaders of the 27-nation bloc said in a draft statement at today’s summit in Brussels.

Oil has gained 56 percent since April 20 as the dollar index, a measure of the greenback’s value against six other currencies, has had a 6.9 percent drop. The euro has fallen 0.8 percent against the U.S. currency this week.

Iran Protests Continue

Crude futures may fall next week on speculation U.S. fuel stockpiles will increase as the recession and rising prices sap consumption, according to a Bloomberg News survey.

Fourteen of 32 analysts surveyed, or 44 percent, said futures will decline through June 26. Thirteen respondents, or 41 percent, forecast that the market will be little changed and five said prices will climb. Last week, 49 percent of analysts said oil would increase.

In Iran, the second-largest producer in the Organization of Petroleum Exporting Countries, supporters of presidential contender Mir Hossein Mousavi took to the streets to protest against June 12 re-election of President Mahmoud Ahmadinejad.

Brent crude for August settlement was at $71.77 a barrel, up 71 cents, on London’s ICE Futures Europe exchange at 12:53 p.m. London time.

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net

Last Updated: June 19, 2009 08:23 EDT