By Gavin Evans Feb. 22 (Bloomberg) -- Crude oil rose for a fifth day in New York on speculation energy demand will increase as the global economy recovers from its worst recession since World War II. Oil climbed above $80 a barrel for a second session after Iran’s OPEC governor Mohammad Ali Khatibi said in an interview on the Shana Web site yesterday that global consumption may climb by as much as 1.4 million barrels a day in the second half of 2010. Prices pared earlier gains as the dollar traded little changed after posting its sixth straight weekly increase against the euro, the longest streak since 2000. “That growth story suggests that oil prices will continue to firm as the global economy recovers,” said Toby Hassall, research analyst with CWA Global Markets Pty in Sydney. “But that firming dollar, if it does continue, that will keep prices fairly well in check.” Crude oil for March delivery rose as much as 70 cents, or 0.9 percent, to $80.51 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $80.18 at 2:22 p.m. in Singapore. The contract, which expires today, rose 0.9 percent to close at $79.81 a barrel on Feb. 19, the highest settlement since Jan. 12. The more actively traded April contract climbed as much as 72 cents, or 0.9 percent, to $80.78, and was at $80.30 at 2:28 p.m. in Singapore. Oil prices climbed 7.7 percent last week, the biggest gain since October, as U.S. refiners lifted operating rates for a second week and the Federal Reserve increased its discount rate for the first time in three years amid signs of recovery in the nation’s economy. Economic Outlook A report today in the U.S., the world’s biggest oil consumer, will probably show economic activity jumped to its highest in six months in January, according to a Bloomberg News survey of economists. Oil prices may “creep” toward $84 in coming weeks if there is sufficient economic data to support the more positive sentiment in the market, CWA’s Hassall said. Still, gains beyond that may be limited, he said. While developing Asian nations will underpin demand, Europe’s prospects aren’t looking strong, and that will in-turn help support the dollar, he said. “We’re just not seeing any significant improvement in western oil demand,” he said. “I don’t see crude oil sustaining any rallies at this point. Really we’re just retracing the sharp correction that we saw in January.” Oil fell as low as $69.50 on Feb. 5 as rising job losses in the U.S. and debt concerns in Europe pulled U.S. stock prices to a three-month low and prompted selling of a broad range of commodities. Investors Return Hedge-fund managers and other large speculators last week increased bets on rising oil prices for the first time since mid-January, according to U.S. Commodity Futures Trading Commission data. Speculative net-long positions, the difference between orders to buy and sell the commodity, jumped 63 percent to 68,436 contracts on the New York Mercantile Exchange in the week ended Feb. 16, the commission said in its weekly report. It was the first increase since the week ended Jan. 12. Brent crude for April delivery rose as much as 75 cents, or 1 percent, to $78.94 a barrel on the London-based ICE Futures Europe exchange, and was at $78.63 at 1:06 p.m. Singapore time. It climbed 0.5 percent to $78.19 on Feb. 19, the highest settlement price since Jan. 13. Strikes at Total SA refineries and depots in France also helped push product prices higher. Plants are being prepared for the shutdown of crude processing as the strike enters its seventh day, the company said yesterday. To contact the reporter on this story: Gavin Evans in Wellington at gavinevans@bloomberg.net.

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