Crude oil rose from a seven-week low on speculation demand will improve as the global economy recovers from its worst recession since World War II.
A report tomorrow in the US, the world's largest oil consumer, will probably show wholesale inventories increased for a third month in December, according to economists surveyed by Bloomberg News. Oil also gained after Nigerian rebels said they disabled a trunk oil pipeline operated by Royal Dutch Shell.
``Industrial production around the globe will continue to rise,'' Macquarie Group said in a commodity research note dated today. Last week's Institute for Supply Management survey in the US was ``substantially'' better than forecast and ``there is nothing to suggest that it will slip from the current high levels.''
Crude oil for March delivery rose as much as 95 cents, or 1.3 per cent, to $US72.14 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $US71.65 at 8:14 a.m. in Singapore.
The contract dropped 2.7 per cent to $US71.19 a barrel on February 5, the lowest settlement since December 15. Prices plunged 7.8 per cent the past three sessions as debt worries in Europe lifted the US dollar to an eight-month high against the euro and higher- than-forecast job losses in the US depressed global stock and commodity prices.
The US dollar climbed to $US1.3660 against the euro today, its fourth straight gain. It closed at $US1.3678 in New York late February 5, having earlier touched $US1.3586, the highest level since May 20. A stronger US dollar reduces the investment appeal of commodities priced in the currency.
Demand doubts
New York oil futures have fallen 15 per cent from a 15-month high of $US83.95 on Jan. 11, as the US dollar rose and investors fret that tighter lending controls in China, the world's largest second-largest consumer, would slow demand growth.
Price jumped 2.1 per cent on February 1 when the Institute for Supply Management's US factory index showed its biggest gain in five years in January.
March Brent crude, the pricing benchmark for most African oil grades, rose 38 cents, or 0.6 per cent, to $US69.97 a barrel on the London-based ICE Futures Europe exchange.
The contract, which expires February 11, fell 3.5 per cent to $US69.59 on February 5, the lowest close since Oct. 7. The more widely held April contract rose 0.6 per cent to $US70.50 today.
An overnight attack at Obunoma, south of the Nigerian oil hub of Port Harcourt, cut supplies from the Nembe Creek, Soku, Belema and Ekulama fields, the Joint Revolutionary Council said in an e-mailed statement yesterday. Shell hasn't received any report of the attack, the company's Nigeria spokesman Precious Okolobo said yesterday.
Hedge-fund managers and other large speculators reduced their bets on rising oil prices for a third week, according to US Commodity Futures Trading Commission data.
Speculative net-long positions, the difference between orders to buy and sell the commodity, fell 14 per cent to 86,027 contracts on the New York exchange in the week ended February 2, the Washington-based commission said in its weekly report.
