Oct. 14 (Bloomberg) -- Crude oil rose in New York, heading for its biggest two-day gain in three weeks, on speculation the U.S. government will invest $125 billion in nine banks, helping to stave off a global recession.

Oil followed stock markets higher after people briefed on the package said the Bush administration will announce the first portion of a $700 billion rescue package approved by Congress. China, the world's second-largest energy user, increased crude oil imports by 10 percent in September to meet rising demand from refineries. Oil also gained as the dollar fell the most against the euro in three weeks.

``The market is saying that things won't get as bad as it seemed last week,'' Andy Sommer, an analyst with HSH Nordbank in Hamburg. ``We don't expect the global economy to fall into a big recession. It won't be a new Great Depression.''

Crude oil for November delivery rose as much as $3.64, or 4.5 percent, to $84.83 a barrel in electronic trading on the New York Mercantile Exchange. It was at $84.06 a barrel at 1:44 p.m. London time. Oil has climbed 7.3 percent in the past two days, the most since Sept. 22.

Prices are down 1.9 percent from a year ago and have dropped 43 percent from a July 11 record of $147.27 a barrel.

``This gain is psychological, as there is an expectation the financial turmoil will be over and there is a recovery of the economy,'' said Tetsu Emori, a fund manager at Astmax Ltd. in Tokyo. ``It's too early to say that demand for commodities will be coming back. These things take time.''

Rescue Plan

The proposed cash injections in exchange for preferred shares are part of a $700 billion rescue approved by Congress and follow similar moves by European leaders to unfreeze credit markets by helping beleaguered banks.

Stocks climbed worldwide, driving the MSCI World Index to its biggest two-day gain on record. Japan's Nikkei 225 Stock Average jumped the most ever.

The U.S. currency weakened as much as 1.9 percent against the euro to $1.3767, bolstering the appeal of dollar-priced commodities used to hedge against inflation.

Brent crude oil for November settlement climbed as much as $3.28, or 4.2 percent, to $80.74 a barrel on London's ICE Futures Europe exchange. It was at $80.50 a barrel at 1:26 p.m. London time.

U.S. oil and gasoline inventories probably rose last week as production increased and refineries opened units that were shut last month because of Hurricanes Gustav and Ike, a Bloomberg News survey of analysts showed.

Growing Stockpiles

Crude oil stockpiles probably increased 2.6 million barrels in the week ended Oct. 10 from 302.6 million the week before, according to the median of 10 analyst estimates before an Energy Department report this week.

The report may show refineries operated at 83.8 percent of capacity, up 2.9 percentage points from the week before, and gasoline stockpiles rose 3 million barrels from 186.8 million barrels, according to the survey. Supplies of distillate fuel, a category that includes heating oil and diesel, probably gained 500,000 barrels from 122.6 million barrels.

The Energy Department is scheduled to release its weekly report on Oct. 16 in Washington.

``The big unknown is whether there will be an effect on Asian demand, which is keeping demand numbers in the black,'' said HSH Nordbank's Sommer.

Chinese imports climbed to 15.03 million metric tons, or 3.66 million barrels a day, last month, the Beijing-based Customs General Administration of China said on its Web site today. The rate of increase compares with an 11.5 percent gain in August and a 7 percent decline in July.

To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net. Grant Smith in London at gsmith52@bloomberg.net

Last Updated: October 14, 2008 08:46 EDT