Crude oil rose in New York for the first time in four days as the dollar weakened, bolstering the investment appeal of commodities, and as China confirmed its August net imports were the second highest on record. Oil climbed above $70 a barrel as the dollar fell against the euro, leading investors to buy oil and gold to hedge their inflation risk. Figures released in Beijing today showed net crude imports by Asia’s largest oil consumer rose 18 percent to 17.92 million metric tons, confirming preliminary data released on Sept. 11. “Oil prices are slightly higher this morning and the weakening in the U.S. dollar is probably a contributing factor,” said David Moore, commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. “The overall picture for China remains one of high levels of crude imports.” Crude oil for October delivery rose as much as 52 cents, or 0.8 percent, to $70.23 a barrel in electronic trading on the New York Mercantile Exchange. The contract, which expires today, was at $69.91 at 12:36 p.m. Singapore time. The more widely traded November future was up 30 cents at $70.23. Prices have gained 57 percent this year on speculation global fuel demand will recover as economies emerged from the recession, and as a weakening dollar encouraged investors to buy commodities as a hedge against inflation. The dollar dropped to $1.4714 per euro at 1:31 p.m. Tokyo time from $1.4680 in New York yesterday. A meeting of the Federal Reserve today in Washington may have an impact on the dollar and guide oil trading, according to Jim Ritterbusch, president at trading adviser Ritterbusch and Associates. “The Fed rate decision can be expected to influence trade through the rest of the week,” he said in a note to clients. “The market continues to gravitate on both sides of the $70 mark.” Crude Imports China’s net crude oil imports in August were second only to the record 19.2 million tons in July. A weekly U.S. Energy Department report tomorrow may show crude oil inventories declined a fourth week, according to analysts surveyed by Bloomberg News. Crude oil inventories fell 1.5 million barrels in the week to Sept. 18, from 332.8 million, according to the median of 11 estimates in a Bloomberg survey ahead of the Energy Department’s weekly report. Nine of the analysts polled said stockpiles dropped and two forecast an increase. Distillate fuel inventories probably increased 1.2 million barrels, the survey showed. Stockpiles, which include heating oil and diesel, were previously at 167.8 million barrels, the most since January 1983. Gasoline supplies are expected to have gained 200,000 barrels from 207.7 million the week before, which would be a third weekly increase, according to the median of responses. Refineries operated at 85.9 percent of capacity last week, down 1 percentage point from the prior week, based on the median of survey responses. Refinery Maintenance U.S. refineries usually shut processing units for maintenance in September and October as summer gasoline demand wanes and before heating oil usage rises in the winter. Refining operations fell in September in nine of the past 10 years and extended declines through October in four of them, according to the Energy Department. The Energy Department is scheduled to release its Weekly Petroleum Status Report in Washington tomorrow. The industry- funded American Petroleum Institute will put out its own data later today. Brent crude oil for November settlement rose as much as 59 cents, or 0.9 percent, to $69.28 a barrel on the London-based ICE Futures Europe exchange. It traded at $68.92 a barrel, up 23 cents, at 12:39 p.m. in Singapore. Yesterday, the contract settled at $68.69, falling 3.7 percent, the biggest drop since Aug. 31. “Yesterday, in the absence of positive new economic news, we saw the oil prices were a bit lower,” Moore said. “Also the fact that equity markets were off, that was also a negative for the oil price as well.”

Source