Oil Rises for First Day in Five as Dollar Slump Boosts Commodities Demand

Crude oil rose in New York for the first time in five days as the dollar fell against the euro, bolstering investor demand for commodities.

Oil climbed above $77 a barrel as the dollar dropped for the fifth day in six against the 16-nation euro. Futures yesterday declined to a one-week low after U.S. crude imports jumped to the highest level in almost four years, leading to an unexpected increase in commercially held inventories.

“Sentiment is very mixed,” Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney, said by telephone. “The oil market looks to be nicely controlled within a range. The fundamental story is not clear. We saw inventory builds at a time when we didn’t expect them to rise.”

Crude for September delivery gained as much as 46 cents, or 0.6 percent, to $77.45 a barrel in electronic trading on the New York Mercantile Exchange. It was at $77.29 at 3:18 p.m. Singapore time. Yesterday, the contract fell 51 cents, or 0.7 percent, to $76.99, the lowest settlement since July 21. Futures have gained 22 percent in the past year.

The dollar fell to $1.3046 per euro from $1.2995 yesterday in New York. The common currency has been pushed higher this week after stress-test results released July 21 showed only seven European banks needed to raise capital.

U.S. crude stockpiles increased 7.3 million barrels to 360.8 million in the week ended July 23, a four-week high, the Energy Department said in a report yesterday. Imports surged 1.18 million barrels a day, or 12 percent, to 11.2 million, the highest rate since the week to Aug. 25, 2006.

Durable Goods

Oil has rebounded from as much as 14 percent of losses this year amid speculation global fuel demand will increase as the economy sustains a recovery.

Business investment in the U.S., the world’s largest economy, picked up in the second quarter. June orders for durable goods, or non-military capital equipment excluding aircraft, climbed 0.6 percent after jumping 4.6 percent in May, more than previously reported, Commerce Department data yesterday showed. Sales of such gear, used in calculating gross domestic product, also rose.

The Commerce Department tomorrow may report the U.S. economy expanded at a 2.5 percent annual pace from April through June, compared with a 2.7 percent rate in the first three months of the year, according to the median estimate from analysts surveyed by Bloomberg News.

Brent crude for September settlement on the London-based ICE Futures Europe exchange rose as much as 44 cents, or 0.6 percent, to $76.50 a barrel. It was at $76.35 at 3:22 p.m. Singapore time. Yesterday, the contract declined 7 cents to settle at $76.06.

To contact the reporter on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net

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