Oil Rises a Second Day

Crude oil rose for a second day as a weakening dollar prompted investors to buy commodities as an inflation hedge.
TradingEconomics.com, Bloomberg 8/19/2008 7:55:54 PM

Oil rebounded as the dollar fell against the euro from its highest level since Feb. 20. Prices had declined in the previous three trading sessions before yesterday, reaching $112.87 a barrel on Aug. 18, the lowest close since May 1. Crude also gained on forecasts a government report today will show a fourth weekly decline in U.S. gasoline stockpiles.

Crude oil for September delivery rose as much as 83 cents, or 0.7 percent, to $115.36 a barrel on the New York Mercantile Exchange and was at $114.98 at 9:10 a.m. Singapore time. Futures touched a 15-week low of $111.34 a barrel on Aug. 15. Prices are up 62 percent from a year ago. Yesterday, futures gained $1.66, or 1.5 percent, to settle at $114.53 a barrel.

The September oil contract expires at the close of Nymex trading today. The more-active October contract gained as much as 84 cents, or 0.7 percent, to $115.38 a barrel. It was at $114.94 a barrel at 9:21 a.m. Singapore time.

The U.S. Dollar Index in New York, which tracks the currency against six others, fell for a third day after rising to its highest since January last week. The index, traded on ICE Futures in New York, was down 0.1 percent to 76.742.

Brent crude oil for October settlement rose as much as 90 cents, or 0.8 percent, to $114.15 a barrel on London's ICE Futures Europe exchange. It was at $113.60 a barrel at 9:18 a.m. Singapore time. The contract yesterday increased $1.31, or 1.2 percent, to settle at $113.25 a barrel.

Venezuela, South America's biggest oil producer, will propose that the Organization of Petroleum Exporting Countries cut oil output quotas if prices continue to fall, Energy and Oil Minister Rafael Ramirez said. OPEC, which is responsible for more than 40 percent of global oil production, is scheduled to meet next on Sept. 9 in Vienna.

U.S. supplies of gasoline probably fell 3 million barrels last week from 202.8 million barrels the previous week, according to the median of 13 responses in a Bloomberg News survey of analysts. The Energy Department is scheduled to release the report at 10:35 a.m. in Washington.

Gasoline for September delivery rose 1.61 cents, or 0.6 percent, to $2.88 a gallon on the Nymex at 8 a.m. Singapore time. It rose 4.87 cents, or 1.7 percent, yesterday to settle at $2.8639 a gallon in New York. Futures reached a record $3.631 a gallon on July 11.

Inventories of crude oil probably rose 1.05 million barrels in the week ended Aug. 15, the survey showed. Stockpiles of distillate fuel, including heating oil and diesel, probably gained 1 million barrels.