The price of crude oil rose after an industry-funded report showed a drop in inventories in the US and the dollar fell to near its lowest level against the euro in 2009, Bloomberg reported.

Crude oil for September 2009 delivery gained as much as $0.45, or 0.6%, to $71.87 a barrel on the New York Mercantile Exchange and was at $71.78 at 11.06am in Singapore. On 4 August the price of oil fell $0.16, or 0.2%, to settle at $71.42.

Yesterday the American Petroleum Institute (API) said in a report that crude supplies declined by 1.52 million barrels last week, bolstering optimism that fuel demand is rebounding.

Oil, a dollar-denominated commodity, also gained after the greenback weakened against the euro and US equities increased.

On 4 August the dollar dropped to $1.4417 per euro at 11.07am in Singapore from $1.4408 in New York. The US currency declined to $1.4445 on 3 August, the lowest since 18 December 2008. A weaker dollar bolsters the appeal of commodities as a hedge against inflation.

US stocks advanced after pending sales of existing homes rose more than forecast in June 2009. The API report showed that US gasoline inventories rose 2.1 million barrels to 215.7 million in the week ended July 31 2009.

A US Energy Department report is likely to show US crude oil stockpiles rose 600,000 barrels, according to analysts surveyed by Bloomberg News. Oil-supply totals from the API and Energy Department moved in the same direction 76% of the time over the past four years, Bloomberg data shows.

Brent crude oil for September 2009 settlement increased $0.47, or 0.6%, to $74.75 a barrel on London’s ICE Futures Europe Exchange at 11.06am in Singapore. On 4 August the contract rose $0.73, or 1%, to $74.28.