Oct. 14 (Bloomberg) -- Crude oil rose above $75 a barrel in New York, the highest level in a year, on optimism that the global economic recovery and fuel-demand growth will accelerate.

Oil climbed for a fifth day as the dollar declined and equities advanced around the world. Crude imports by China, the fastest-growing energy user, were 15 percent higher in September than a year ago, according to a government report today. The dollar fell to a 14-month low against the euro, bolstering the appeal of commodities as a hedge against inflation.

“The combination of a weak dollar and an equity rally is fueling the rally,” said Chip Hodge, who oversees a $9 billion natural-resource bond portfolio as senior managing director at MFC Global Investment Management in Boston. “There’s a feeling that we’re past the bottom of the recession and will start to see demand growth next year.”

Crude oil for November delivery rose $1.03, or 1.4 percent, to $75.18 a barrel at 2:46 p.m. on the New York Mercantile Exchange, the highest settlement since Oct. 14, 2008. Prices are up 69 percent this year.

Prices advanced from the settlement after the American Petroleum Institute reported at 4:30 p.m. that U.S. stockpiles fell 172,000 barrels to 339.2 million last week. Oil was up $1.38, or 1.9 percent, to $75.53 a barrel in electronic trading at 4:31 p.m.

Stocks advanced, sending the Dow Jones Industrial Average above 10,000 for the first time in a year, on better-than- estimated earnings at JPMorgan Chase & Co. and Intel Corp. The Dow jumped 144.8 points, or 1.5 percent, to 10,015.86 as of 4:04 p.m., the highest level since Oct. 3, 2008.

Higher Earnings

“We keep getting better-than-expected earnings, which have boosted equities,” said John Kilduff, senior vice president of energy at MF Global in New York. “The dollar keeps hitting new lows, translating into higher energy prices.”

The U.S. currency declined 0.4 percent to $1.4915 per euro from $1.4854 yesterday, after trading at $1.497, the weakest level since August 2008.

The “weakness of the dollar” is bolstering oil prices, said Abdullah bin Hamad al-Attiyah, Qatar’s energy minister. The Persian Gulf nation is OPEC’s second-smallest oil producer.

“This is not a figure related to growth” in demand, he said in an interview in the Qatari capital of Doha today. “The price of oil is not related to actual demand.”

China’s crude-oil imports climbed 15 percent to 17.2 million tons last month from a year earlier, while exports reached 390,000 tons, according to the customs bureau. Imports gained 8.2 percent to 146 million tons in the first nine months.

Demand-Led Rally

“People are now getting a semblance that the recovery they’ve been talking about is actually taking place,” said Amrita Sen, an analyst with Barclays Capital in London. “It’s very much a demand-led rally. China’s crude imports have been very strong.”

The Organization of Petroleum Exporting Countries raised its 2010 global demand forecast yesterday on expansion in emerging economies. The 12-member group predicted consumption next year will rise 0.8 percent to 84.93 million barrels a day. The International Energy Agency and U.S. Energy Department increased their demand projections this month.

Brazil, Russia, India and China, the so-called BRIC nations, “are expected to be huge consumers of commodities,” Stephen Schork, president of the Schork Group Inc. of Villanova, Pennsylvania, said in an interview with Bloomberg Radio. Growth in these countries “is underpinning the commodity arena.”

U.S. gasoline consumption averaged 9.06 million barrels a day last month, up 6.6 percent from a year earlier, a monthly report from the American Petroleum Institute said. Total deliveries of petroleum products averaged 18.6 million barrels a day in September, up 4.1 percent from a year earlier, the industry-funded group said today in a monthly report.

‘Massive Surplus’

“I wonder how sustainable this rally is because we still have a long way to go before the economy recovers,” said Jason Schenker, president of Prestige Economics LLC, an Austin, Texas- based energy consultant. “There’s a massive surplus in both crude and product inventories.”

The Energy Department will probably report that crude-oil inventories rose by 1 million barrels in the week ended Oct. 9, according to the median of estimates from 13 analysts polled by Bloomberg News. Gasoline stockpiles probably climbed 1.13 million barrels, the survey showed.

Supplies of distillate fuel, a category that includes heating oil and diesel, declined 100,000 barrels last week, according to the survey. Stockpiles in the week ended Oct. 2 were at the highest level since January 1983.

Arctic Air

“Hope about the economy is overwhelming inventories, which are very high,” Hodge said. “We would need sustained arctic air for a long time to make a dent in heating oil inventories.”

The Energy Department will release its weekly report tomorrow in Washington, a day later than usual because of the Columbus Day holiday on Oct. 12.

Brent crude oil for November settlement rose 70 cents, or 1 percent, to end the session at $73.10 a barrel on the London- based ICE Futures Europe exchange. It was the highest close since Aug. 24.

Oil volume in electronic trading on the Nymex was 516,993 contracts as of 3:01 p.m. in New York. Volume totaled 755,110 contracts yesterday, 34 percent higher than the average over the past three months. Open interest was 1.26 million contracts, the most since Feb. 12.

To contact the reporters on this story: Mark Shenk in New York at mshenk1@bloomberg.net

Last Updated: October 14, 2009 16:51 EDT