Crude oil rose for a second day as stock markets rallied on speculation government action will revive the global economy, while the falling U.S. dollar boosted the appeal of commodity investments. Saudi Arabia, the world’s top oil exporter, decided to cut production by 300,000 barrels a day below its OPEC quota to prop up prices, Algerian Oil Minister Chakib Khelil told the state- run newspaper El Moudjahid. Equities rose in Europe and Asia after President Barack Obama’s treasury secretary nominee pledged an expanded and prolonged role in stabilizing banks. “We expect stabilization for the global economy, which could be as soon as the first quarter, and for prices to gradually increase,” said Eliane Tanner, an analyst at Credit Suisse Group in Europe. “OPEC has been quite effective in cutting production and we should see a tighter market.” Crude oil for March delivery gained as much as $1.62, or 3.6 percent, to $46.64 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $44.15 at 11:50 a.m. London time. New York oil was $1.49 less expensive than Brent crude traded in London, the narrowest discount since Jan. 5. Brent for March settlement was at $45.57 a barrel, up 55 cents, at 11:50 a.m. London time on London’s ICE Futures Europe exchange. Saudi Arabia will make the reduction before a March 15 meeting of the Organization of Petroleum Exporting Countries, El Moudjahid cited Khelil as saying yesterday in Algiers. The U.S. Energy Department releases its weekly supply report at 11 a.m. today in Washington, a day later than usual because of the Martin Luther King Jr. holiday on Jan. 19. The report may show that crude stockpiles rose 1.4 million barrels in the week ended Jan. 16, according to the median of 14 analyst estimates in a Bloomberg News survey. Contango Flattens New York futures with later expiry dates are becoming less expensive relative to prompt contracts. The price of oil for delivery in April is $1.85 higher than for March, down from a $4.45 premium on Jan. 16. December futures are $9.46 higher from the front month, versus $15.04 at the end of last week. Companies including Citigroup Inc.’s Phibro LLC, Royal Dutch Shell Plc and BP Plc have stored oil on tankers as the so- called contango, a market where buyers pay more for supplies later in the year than now, allowed them to profit from hoarding crude. ‘Opportunities Disappearing’ “The opportunities are disappearing,” said Ehsan Ul-Haq, head of research at oil market consultant JBC Energy GmbH in Vienna. “Freight rates have been rising. It is becoming difficult to store crude on tankers.” The MSCI World Index added 0.9 percent to 846.176 at 9:30 a.m. in London, sending the measure higher for a second day. The dollar declined for the first time in four days against the euro, trading at $1.3011 as of 10:58 a.m. London time, from $1.2868 yesterday. “We’re seeing oil prices in positive territory because of steadier stock markets,” said Tony Machacek, a broker at Bache Commodities Ltd. in London. “And there’s still some positive sentiment out there from the Obama effect.” Weakness in the U.S. currency often triggers demand for commodities like crude and gold that can be used to hedge against inflation.

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