Crude oil rose above $67 a barrel in New York as the dollar retreated from gains and investors purchased futures on signs of a global economic rebound. Oil climbed, reversing earlier declines, after the dollar slid against the euro today, prompting investors to buy commodities as an inflation hedge. Chinese manufacturing expanded for a sixth month in September and Japanese industrial output climbed for a sixth time in August. An industry report yesterday showed U.S. crude stockpiles climbed for a third week. “There is still this feeling that the worst is over so eventually the economy is going to pull us out of this,” said Anthony Nunan, an assistant general manager for risk management at Mitsubishi Corp. in Tokyo. “The fundamentals don’t look good but we’ll see fund buying interest at this level.” Crude oil for November delivery rose as much as 53 cents, or 0.8 percent, to $67.24 a barrel in electronic trading on the New York Mercantile Exchange. It was at $67.05 a barrel at 11:43 a.m. Singapore time. Yesterday, the contract fell 13 cents to settle at $66.71. Oil is poised for a 4 percent decline for the three months ending today, the first drop in three quarters. The dollar traded at $1.4625 per euro at 11:11 a.m. Singapore time, from $1.4587 yesterday, when it touched $1.4527, the strongest level since Sept. 14. The dollar has weakened 4 percent against the euro this quarter. “The dollar is having an effect,” said Ben Westmore, an energy and minerals economist at National Australia Bank Ltd. in Melbourne. “Part of the reason earlier in the week that oil didn’t fall on the stronger dollar was that it seemed to have fallen to those resistance levels around the $65 a-barrel mark.” Manufacturing, Stimulus Chinese manufacturing expanded on government stimulus spending and record bank lending, a purchasing managers’ index released by HSBC Holdings Plc showed. The index dropped to a seasonally adjusted 55 from 55.1 in August, HSBC said today. A reading above 50 indicates an expansion. Japanese factory output rose 1.8 percent last month after climbing 2.1 percent in July, the Trade Ministry said today in Tokyo, as emergency spending by governments worldwide rekindled global trade. U.S. crude inventories rose to 340 million barrels last week, according to an American Petroleum Institute report. Gasoline supplies decreased 1.72 million barrels to 212.5 million, it said. U.S. Inventories An Energy Department report scheduled for release today will probably show crude stockpiles rose by 2 million barrels last week, according to the median estimate of 17 analysts surveyed by Bloomberg News. Gasoline and distillate fuel inventories also increased, the survey showed. Gasoline inventories probably rose 1 million barrels from 213.1 million the week before, according to the responses. Supplies of distillate fuel, a category that includes heating oil and diesel, likely increased 1.2 million barrels from a 26- year high of 170.8 million the prior week. The Energy Department is scheduled to release its weekly report at 10:30 a.m. in Washington. Also weakening prices, confidence among U.S. consumers unexpectedly fell in September as a rising unemployment rate weighed on households, the New York-based Conference Board said yesterday. The group’s confidence measures of present conditions and its expectations for six months from now declined. “U.S. confidence came out last night and was a little bit softer than expected and that weighed on the price,” Westmore said. “It’s probably going to range around the $70 a-barrel mark” in the short term, he said. Brent crude oil for November settlement rose as much as 42 cents, or 0.6 percent, to $65.91 a barrel on the London-based ICE Futures Europe exchange. It was at $65.76 at 11:33 a.m. Singapore time. It dropped 5 cents to $65.49 a barrel yesterday. To contact the reporter on this story: Christian Schmollinger in Singapore at Christian.s@bloomberg.net; Ben Sharples in Melbourne at bsharples@bloomberg.net

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