By Alexander Kwiatkowski Feb. 2 (Bloomberg) -- Crude oil climbed for a second day on speculation that recovering demand in the U.S., the world’s biggest energy consumer, is causing fuel supplies to drop. U.S. distillate fuel stockpiles probably fell last week as wholesalers prepared for colder weather, a Bloomberg News survey showed before an Energy Department report tomorrow. Oil also advanced after a report showed an increase in U.S. manufacturing and as the dollar gave up gains against the euro, boosting the appeal of commodities to investors. “The U.S. inventory numbers will be important,” said Eliane Tanner, an analyst at Credit Suisse Group AG in Zurich. “Demand in the U.S. has been rather weak and inventories have been falling only because of low import numbers, not because of strength in demand.” Crude oil for March delivery climbed as much as $1.01, or 1.4 percent, to $75.44 a barrel in electronic trading on the New York Mercantile Exchange. It was at $75.08 at 1:39 p.m. London time. Yesterday, the contract rose 2.1 percent to settle at $74.43, the biggest one-day increase since Jan. 4. Oil advanced the most in four weeks yesterday after a report showed manufacturing in the U.S. increased at the fastest pace since 2004. The Institute for Supply Management’s factory index climbed to 58.4 in January, data showed yesterday, exceeding the median forecast of 55.5 from 67 economists surveyed by Bloomberg News. Readings higher than 50 signal an expansion. Manufacturing accounts for about 12 percent of the economy. Fuel Supply Forecasts U.S. distillate fuel stockpiles, including heating oil and diesel, declined 1.15 million barrels in the week ended Jan. 29, based on the median of 12 estimates from analysts before tomorrow’s the Energy Department report. Supplies previously climbed to 157.5 million barrels, 16.2 percent above the five- year average level. “The biggest trigger is really the strong economic data we saw yesterday. It was really a surprise,” said Hannes Loacker, an analyst with Raiffeisen Zentralbank Oesterreich in Vienna. “If demand in the U.S. is coming back a bit, it will definitely support oil prices in the medium term.” The dollar weakened against the euro, falling as low as $1.3959 against the European currency, after rising earlier as high as $1.3887. Colder weather moved into the U.S. Northeast, which consumes about four-fifths of the country’s heating oil, in the final days of last month. Temperatures across the eastern states will be below normal from Feb. 9 to Feb. 15, according to the National Weather Service. Crude Stockpiles Refineries operated at 78.4 percent of capacity, unchanged from the previous week, according to the median of responses. Analysts were split over whether stockpiles of crude oil rose or fell last week. Inventories climbed 400,000 barrels from 326.7 million the previous week, according to the survey. Six of the respondents said there was a gain, four forecast a decline and two estimated that there was no change. Gasoline supplies climbed 1.25 million barrels from 229.4 million, the survey showed. All of the analysts forecast a gain. The Energy Department is scheduled to release its weekly report at 10:30 a.m. tomorrow in Washington. The industry-funded American Petroleum Institute in Washington, D.C., will release its own inventory report today. Brent crude oil for March settlement rose as much as $1.41, or 1.9 percent, to $74.52 a barrel on the London-based ICE Futures Europe exchange. It was at $73.80 at 1:39 p.m. London time. Yesterday, the contract climbed 2.3 percent, the most since Jan. 4, to settle at $73.11. OPEC Quotas Oil is likely to trade in a range between $60 and $90 a barrel in the next two years, BP Plc Chief Executive Officer Tony Hayward said today. Global oil demand may rise between 500,000 and 800,000 barrels a day this year as the global economy makes a “slow and gradual” recovery from recession. He spoke in a Bloomberg Television interview today. The Organization of Petroleum Exporting Countries is unlikely to change oil-production quotas at its meeting next month with market conditions as they currently are, OPEC Secretary-General Abdalla el-Badri said. “If things stay as they are, with prices at this level, ministers will be reluctant to do anything,” el-Badri told reporters in London today. A price range of $70 to $90 a barrel “is acceptable at this time,” he said, adding that the market is currently influenced by fluctuations in the dollar and equity markets, not demand and supply fundamentals. To contact the reporter on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net

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