Nov. 11 (Bloomberg) -- Crude oil rose as Chinese crude imports climbed in October to the second-highest level ever as increased production spurred fuel demand.

China’s net oil imports were almost 19 million tons, or 4.5 million barrels a day, according to the Beijing-based customs office. China’s industrial output expanded last month, signaling a strengthening recovery in the world’s second-biggest oil- consuming country after the U.S.

“The Chinese numbers are obviously very supportive,” said John Kilduff, partner at Round Earth Capital, a hedge fund that focuses on food and energy commodity investments, in New York. “The consistently high import numbers fly in the face of those who say there is nothing fundamental about the rise in oil prices.”

Oil for December delivery rose 23 cents, or 0.3 percent, to settle at $79.28 a barrel on the New York Mercantile Exchange. Prices climbed 1.3 percent to $80.10 and dropped as much as 0.6 percent during today’s session. Futures have increased 78 percent this year.

China’s net imports in October were the highest since July’s record 19.2 million barrels. China and the U.S. are responsible for 33 percent of global oil consumption, according to BP Plc.

“The only two data points we’ve seen that have given us any hope at all of greenshoots are China, where they are pulling in a fair amount of oil to store and use,” and higher gasoline demand, Neil McMahon, an energy analyst at Sanford C. Bernstein in London, said on Bloomberg radio.

Demand Projections

Consumption in countries outside of the Organization for Economic Cooperation and Development, such as China, India and Brazil, will rise 480,000 barrels a day to 38.68 million barrels a day in 2009, a U.S. Energy Department report showed yesterday. Chinese demand will climb 380,000 barrels a day to 8.21 million.

Demand from the 30 members of the OECD will fall 2.12 million barrels a day to 45.46 million this year, according to the report. The OECD represents most of the world’s high-income economies, such as the U.S., Japan and Germany.

“We will ultimately see oil rise above $100 at some point in the next 18 months, and steadily climb up as we go out toward 2015,” McMahon said. “Demand is bound to pick up, so when it does, the tightness, as far as supply and demand, will increase.”

Energy producers boosted output of crude oil in the Gulf of Mexico as Tropical Storm Ida passed out of the region yesterday. Oil output was down 31 percent today from 43 percent, the Interior Department’s Minerals Management Service said on its Web site.

Dollar Index

Prices retreated from the day’s high after the dollar rebounded. The Dollar Index, which tracks the greenback against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona, rose 0.1 percent to 75.098. Earlier, it reached 74.774, the lowest level since August 2008. The gauge has fallen 7.6 percent in 2009.

“We had the news from China and dollar weakness push us higher this morning, but the market failed to sustain $80,” said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “This is what we call an inside day because all of the action is within yesterday’s highs and lows. We’re consolidating and waiting for the next piece of news.”

Brent crude for December settlement advanced 45 cents, or 0.6 percent, to end the session at $77.95 a barrel on the London-based ICE Futures Europe exchange.

‘Comfortable’ Market

The global crude oil market is “very comfortable” and OPEC is unlikely to increase production quotas significantly, Abdullah bin Hamad al-Attiyah, Qatar’s energy minister, told reporters today in Singapore. “There’s no shortage of supply.”

The Organization of Petroleum Exporting Countries will make “no dramatic change” in output when the group meets next month, he said after attending a signing ceremony for a new chemicals joint venture with Royal Dutch Shell Plc.

The U.S. Energy Department will publish its weekly inventory report tomorrow. U.S. crude-oil stockpiles probably rose 1 million barrels last week as imports increased, according to the median of 16 responses from analysts surveyed by Bloomberg News.

A report from the American Petroleum Institute yesterday showed crude oil supplies rose 1.22 million barrels last week to 337.5 million.

Tomorrow’s report will probably show that gasoline supplies declined 350,000 barrels, according to the survey. Stockpiles of distillate fuel, a category that includes heating oil and diesel, may have slipped 700,000 barrels.

Oil volume in electronic trading on the Nymex was 420,300 contracts as of 3:03 p.m. in New York. Volume totaled 616,841 contracts yesterday, 11 percent higher than the average over the past three months. Open interest was 1.24 million contracts. The exchange has a one-business-day delay in reporting open interest and full volume data.

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

Last Updated: November 11, 2009 16:14 EST