By Christian Schmollinger and Ben Sharples Sept. 2 (Bloomberg) -- Crude oil rose for the first time in three days on expectations of an increase in fuel demand after an industry report showed U.S. stockpiles fell. The American Petroleum Institute said yesterday that crude supplies dropped 3.19 million barrels last week. A U.S. government report today may also show stockpiles declined. Oil’s gains were supported as Australia said economic growth unexpectedly accelerated in the second quarter, adding to expansion in France, Germany and Japan. “The broader economy has shown signs it’s turning around,” said Toby Hassall, a research analyst at Commodity Warrants Australia Pty in Sydney. Should the API figures be “any indication of the EIA numbers tonight, those numbers could be construed as supportive.” Crude oil for October delivery rose as much as 60 cents, or 0.9 percent, to $68.65 a barrel in electronic trading on the New York Mercantile Exchange. It was at $68.48 a barrel at 12:36 p.m. Singapore time. Yesterday, the contract fell 2.7 percent to $68.05, the lowest settlement since Aug. 17. Prices yesterday climbed as much as $1.41 a barrel when reports showed that manufacturing in the U.S. and China, the two biggest energy using nations, expanded in August. The U.S. and China are responsible for more than 30 percent of global crude-oil demand. Oil in New York has traded in a range between $65 and $75 a barrel since July 31. Equities, GDP “Everyone is afraid of the drop-off you saw in equities in September and October and since crude is trading like an asset class, if you see a sell-off in equities, then crude is going to drop,” said Jonathan Kornafel, a Singapore-based director for Asia at options traders Hudson Capital Energy. Australia’s gross domestic product rose 0.6 percent, the biggest gain in more than a year, from the previous three months when it grew 0.4 percent, the Bureau of Statistics said in Sydney today. The median estimate of 20 economists surveyed by Bloomberg News was for a 0.2 percent expansion. U.S. crude oil inventories dropped to 343.5 million barrels in the week ended Aug. 28, the API report showed. A report by the U.S. Energy Information Administration today is likely to show stockpiles declined, according to a Bloomberg News survey. The data may show supplies declined 900,000 barrels from 343.8 million, according to the median of responses from 11 analysts. Oil Stockpiles Distillate fuel inventories, including diesel and heating oil, climbed 920,000 barrels to their highest level since 1983. The Energy Department report will probably show supplies rose 775,000 barrels from 162.4 million the prior week. Heating oil for October delivery was at $1.7654 a gallon, up 0.65 cent, on the Nymex. The contract yesterday fell 1.1 percent to its lowest level since July 29. Gasoline supplies fell 2.81 million barrels to 206.9 million last week, the API report showed. Inventories probably fell 900,000 barrels, a sixth weekly decline, according to the Bloomberg survey. Algeria will call on OPEC members to comply more strictly with production quotas as global stockpiles climb, Oil Minister Chakib Khelil told El Watan, an Algiers-based newspaper. The Organization of Petroleum Exporting Countries, due to meet in Vienna on Sept. 9, has faltered in implementing record supply cuts announced last year. OPEC output averaged 28.445 million barrels a day last month, down 40,000 from July, according to a Bloomberg News survey of oil companies, producers and analysts. The 11 members with quotas, all except Iraq, pumped 26.055 million barrels a day, up 20,000 barrels from the previous month and 1.21 million more than their target. Brent crude oil for October settlement rose as much as 61 cents, or 0.9 percent, to $68.34 a barrel on the London-based ICE Futures Europe Exchange, and was at $68.03 at 12:23 p.m. Singapore time. The contract dropped $1.92, or 2.8 percent, to $67.73 yesterday.

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