Oil rose in New York as investors bought contracts after they deemed yesterday’s decline, the biggest in two months, as excessive. Crude oil, which fell 4.5 percent yesterday, is poised for its biggest weekly drop since July as an Energy Department report showed increases in U.S. fuel stockpiles, boosting speculation of a supply glut. “In the medium term, six to nine months from now, prices are expected to be back up around $70 again so people aren’t going to be sitting on their laurels watching the market go lower,” said Jonathan Kornafel, a director for Asia at options traders Hudson Capital Energy in Singapore. “There will be some buying to add some support.” Crude oil for November delivery rose as much as 60 cents, or 0.9 percent, to $66.49 a barrel on the New York Mercantile Exchange, and traded at $66.47 at 12:07 p.m. in Singapore. Yesterday’s drop was the biggest since July 29. Futures are down 7.8 percent this week, headed for the biggest decline since July 10. Prices have climbed 49 percent this year. “The home sales data in the U.S. was a trigger that contributed to a tumble in the oil price,” said David Moore, a commodity strategist with Commonwealth Bank of Australia. “The oil data is relatively bearish.” The dollar rose, set to snap a two-week decline against the euro. A stronger dollar reduces the attractiveness of commodities as a hedge against inflation. The dollar advanced to $1.4657 per euro as of 12:01 p.m. in Tokyo from $1.4666 yesterday in New York and from $1.4712 a week earlier. Supplies Increase U.S. equities fell for a second day yesterday as sales of existing homes slumped and the Federal Reserve said it will cut the size of two programs meant to bolster credit markets. The Standard & Poor’s 500 Index lost 1 percent in New York and the Dow Jones Industrial Average slipped 0.4 percent. “We expect a hesitant recovery in the U.S. and in that context we’re going to get bits of data that disappoint, and that’s what we saw last night,” Moore said. Supplies of crude oil rose 2.86 million barrels, to 335.6 million, the biggest increase since the week ended July 24, according to the Energy Department report released Sept. 23. Analysts had expected a 1.4 million-barrel decrease. The gain left stockpiles 9.1 percent above the five-year average. U.S. gasoline stockpiles surged 5.41 million barrels last week, more than 10 times the gain forecast by analysts in a Bloomberg News survey. Demand for the fuel slipped 2.3 percent to 8.79 million barrels a day, the lowest since January. Inventories of distillate fuel, a category that includes heating oil and diesel, rose 2.96 million barrels, almost double analyst estimates. Contango Narrows Brent crude for November settlement climbed as much as 78 cents, or 1.2 percent, to $65.60 a barrel on the London-based ICE Futures Europe exchange, and was at $65.57 at 12:02 p.m. Singapore time. Yesterday, the contract dropped $3.17, or 4.7 percent, to $64.82. The premium between later-dated New York oil futures and near-month contracts has narrowed, causing traders to remove crude from storage. Crude for later delivery that is worth more than prompt supplies is a situation known as contango. The price difference between the first-month New York oil future and the second-month future narrowed to 50 cents a barrel today from $1.41 on Aug. 19. That reduces the incentive to hold oil in storage. “As the contango starts to come in you’ll see some of that floating storage start to come in and that’s just going to depress the price even more,” said Hudson Capital’s Kornafel. “There is some pessimism that we’ll be able to eat into these inventories.” OPEC Shipments The Organization of Petroleum Exporting Countries will increase shipments by 0.7 percent to 22.49 million barrels a day by sea in the four weeks to Oct. 10, up from an average of 22.33 million barrels a day in the month to Sept. 12, tracking consultant Oil Movements said in a report yesterday. OPEC agreed at its Sept. 9 meeting in Vienna to maintain production quotas at 24.845 million barrels a day. Compliance is around 65 percent, according to the group. Official data showed net crude oil imports by China, Asia’s largest consumer, rose 18 percent to 17.92 million metric tons in August.

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