Crude rises a third day on economic data

LONDON (Bloomberg) -- Crude oil rose a third day as a weaker U.S. dollar heightened the hedging appeal of commodities and economic data reinforced confidence in the global recovery.

Crude inventories fell 3.28 million barrels last week to 336.2 million, the industry-funded American Petroleum Institute said on Tuesday. The U.S. Energy Department will release its own weekly supply report later on Wednesday. Factory orders in the U.S., the world’s biggest oil consumer, rose for the fifth time in six months in September, the Commerce Department said on Tuesday.

“If you look at the pure data we’ve received, these have been positive,” said Tobias Merath, a commodity analyst at Credit Suisse Group in Zurich. “The dollar has been weaker, and sentiment across commodities has improved, so we’re testing the upper end of the $75 to $80 range.”

Crude oil for December delivery rose as much as 80 cents, or 1 percent, to $80.40 a barrel in electronic trading on the New York Mercantile Exchange. It was at $80.30 a barrel at 10:42 a.m. London time. Oil has gained 80 percent this year.

Oil climbed 1.9 percent on Tuesday after India’s central bank bought 200 metric tons of gold from the International Monetary Fund.

“Commodities overall last night seemed to take the lead from the strong move in gold prices,” Toby Hassall, a research analyst with CWA Global Markets in Sydney, said by phone. “Oil probably tapped some strength from the economic data as well.”

--------------Inventory forecasts

The U.S. Energy Department was scheduled to release its supply report for the week ended Oct. 30 on Wednesday at 10:30 a.m. in Washington. Analysts forecast that stockpiles increased by 1.5 million barrels, according to the median of 16 responses in a survey conducted by Bloomberg News.

Oil-supply totals from the API and Energy Department moved in the same direction 75 percent of the time in the past four years, according to data compiled by Bloomberg.

Wednesday’s report is expected to show that distillate fuel inventories, including heating oil and diesel, probably declined 1 million barrels. Gasoline supplies probably increased 400,000 barrels, the survey showed.

Brent crude for December settlement was at $78.67 a barrel, up 56 cents, on the London-based ICE Futures Europe exchange at 10:44 a.m. London time. The contract increased $1.56, or 2 percent, to end Tuesday’s session at $78.11 a barrel.

The Federal Open Market Committee may indicate there’s no need to raise interest rates when it concludes a two-day meeting later on Wednesday, economists said. The dollar weakened to $1.4765 per euro from $1.4724 Tuesday.

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