March 22 (Bloomberg) -- Crude oil rose above $61 a barrel in New York on speculation that demand will jump as U.S. refiners increase output in preparation for the summer driving season.

Refineries operated at 86.3 percent of capacity last week, the highest since the week ended Feb. 9, according to an Energy Department report yesterday. Gasoline supplies fell for a sixth straight week, the report showed. The profit margin, or ``crack'' spread, for turning crude oil into gasoline and heating oil on March 19 surged to the highest since September 2005.

``We're anticipating that refineries will soon ramp up production, which will lead to increased consumption of crude oil,'' said Aaron Kildow, a broker at Prudential Financial Derivatives LLC in New York. ``The crack is pulling crude oil higher. There is every incentive for refiners to increase their run levels.''

Crude oil for May delivery rose $2.08, or 3.5 percent, to settle at $61.69 a barrel at 2:50 p.m. on the New York Mercantile Exchange. The May contract had its biggest one-day gain since Feb. 8. Prices are little changed from a year ago.

Gasoline for April delivery in New York rose 2.26 cents, 1.2 percent, to close at $1.9575 a gallon. The contract touched $1.985 a gallon on March 20, the highest since Aug. 22.

U.S. gasoline supplies slipped 16.7 million barrels, or 7.3 percent, to 210.5 million barrels in the past six weeks, the Energy Department report showed.

Refinery Maintenance

Refiners are performing maintenance and are starting to maximize gasoline output at this time of year as they prepare for the summer driving season. U.S. gasoline demand peaks between the Memorial Day holiday in late May and Labor Day in early September.

``Now that we seem to have reached our seasonal low in utilization, refineries should become progressively more interested in buying crude to refine into products,'' said Peter Beutel, president of Cameron Hanover Inc., a New Canaan, Connecticut, energy consultant.

The profit margin for turning three barrels of crude oil into two barrels of gasoline and one of heating oil jumped to $21.8744 on March 19, the highest since Sept. 30 2005, based on closing futures prices in New York.

``The wide gasoline crack and concern about gasoline inventories pose continued upside risks to crude prices,'' said Jason Schenker, an economist at Wachovia Corp. in Charlotte, North Carolina.

Gasoline Consumption

U.S. gasoline use over the past four weeks has averaged 9.18 million barrels a day, 2.1 percent higher than a year earlier, according to the Energy Department, which tracks shipments from refineries, pipelines and terminals to calculate demand.

``There's been healthy gasoline demand,'' said Paul Crovo, a Philadelphia-based oil analyst for PNC Wealth Management. ``The turnaround season was bigger than expected. There have been unplanned outages which have caused local dislocations.''

Since early February refineries in Texas, Louisiana, California, Delaware, Ontario, Pennsylvania and Colorado have trimmed fuel output because of fires and interrupted power supplies.

The Organization of Petroleum Exporting Countries' compliance with production limits exceeds 60 percent, Mohamed al- Hamli, the group's president and oil minister of the United Arab Emirates, said today. The 10 members that are subject to output targets agreed to cut production by 1.7 million barrels a day at meetings in October and December.

``We are happy with the level of compliance,'' al-Hamli said in an interview after attending an energy conference in Bangkok, declining to be more specific. ``It's definitely more than 60 percent.''

Brent crude oil for May settlement rose $1.74, or 2.9 percent, to close at $62.51 a barrel on the London-based ICE Futures exchange. It was the highest close since Dec. 20.

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

Last Updated: March 22, 2007 15:35 EDT