Crude oil rose to its highest price in more than three weeks on assumptions that rises in Asian stock markets are the precursor to a recovery in the global economy that would spur fuel demand, Bloomberg reported.
Crude oil for September 2009 delivery rose as much as $0.64, or 0.9%, to $68.69 a barrel in after-hours electronic trading on the New York Mercantile Exchange.
It was at $68.41 a barrel at 10.53am in Singapore. The contract earlier dropped as much as 0.5% to $67.68 a barrel.
The crude oil also increased following investors seeking commodities as a hedge against inflation as the dollar traded near a seven-week low against the euro. The MSCI Asia Pacific Index increased 1% on 27 July, the tenth straight gain and the longest winning streak since January 2004.
Oil last week posted its biggest weekly gain since May and followed a 6.1% rise the week before when US equities climbed 7%.
Oil has moved in tandem with benchmark stock indexes. The Dow Jones Industrial Average and US crude futures showed a correlation of 0.7 in the past month, up from 0.06 in December 2008, according to data compiled by Bloomberg. A correlation of 1 means the two move in lockstep.
According to a US Energy Department report, gasoline inventories increased 813,000 barrels to 215.4 million last week, the sixth straight gain.
An Energy Department report on 22 July showed that crude oil supplies dropped 1.8 million barrels to 342.7 million last week. The reduction left nationwide crude stockpiles 7.3% higher than the five-year average for the period.
Brent crude oil for September 2009 settlement gained as much as $0.70, or 1%, to $71.02 a barrel on London’s ICE Futures Europe exchange, and traded at $70.67 at 10.46am Singapore time. The contract increased 1.5% to $70.32 on 24 July, the highest settlement since June 29.