June 10 (Bloomberg) -- Crude oil rose to a seven-month high after an industry group reported U.S. stockpiles dropped and the dollar declined, bolstering the appeal of energy as an alternative investment. Crude climbed toward $71 a barrel as the American Petroleum Institute said oil supplies fell 5.96 million barrels to 357.9 million last week, the lowest level since March. The Department of Energy will report their data later today. Support for crude prices came on expectations the dollar may extend its decline against the euro on speculation the global recession is ending. “The API numbers are the only reason we’re seeing a rally in the market but we need to see the DOE numbers to verify them,” said Ken Hasegawa, a commodity derivative sales manager at brokers Newedge. “The price is being driven by speculators and not the fundamentals.” Crude oil for July delivery rose as much as 93 cents, or 1.3 percent, to $70.94 a barrel in after-hours trading on the New York Mercantile Exchange. It was at $70.71 a barrel at 12:17 p.m. Singapore time. Yesterday, the contract increased $1.92 to $70.01 a barrel, the highest settlement since Nov. 4. “The oil market is rallying due to weakness in the dollar and more liquidity in the marketplace,” said Mike Sander, an investment adviser at Sander Capital Advisors Inc. in Seattle. “There is clearly more money moving into the commodities markets with the sharp rises in agriculture, softs, metals, and energy.” Oil peaked at $147.27 a barrel on July 11 before slumping to $32.40 on Dec. 19 as the global recession curbed energy use. Euro Gains The euro many gain for a second day today after Goldman Sachs Group Inc. recommended clients buy the currency. The dollar traded at $1.4072 against the euro at 1:15 p.m. in Tokyo, after falling 1.2 percent yesterday. The U.S. Energy Department will probably report tomorrow that refiners boosted operating rates to meet summer gasoline demand, according to a Bloomberg News survey. Refineries probably operated at 86.5 percent of capacity in the week ended June 5, up 0.2 percentage point from the previous week, according to the median of 13 analyst responses. “There are signs that the refineries are starting to tweak up capacity and That means stronger demand for gasoline,” said Mark Pervan, a senior commodity strategist at Australia and New Zealand Banking Group Ltd. in Melbourne, in a Bloomberg Television interview. “ You’re seeing a very pre-emptive market that is buying on any sort of positive news.” Gasoline Supplies Gasoline supplies probably increased 750,000 barrels, the first gain in seven weeks, according to the survey. Stockpiles of distillate fuel, a category that includes heating oil and diesel, probably climbed 1.5 million barrels. Analysts surveyed by Bloomberg News were split over whether crude-oil stockpiles rose or declined last week. The Energy Department is scheduled to release its weekly report at 10:30 a.m. in Washington. The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey. Oil-supply totals from the API and DOE moved in the same direction 76 percent of the time over the past four years, according to data compiled by Bloomberg. West Texas Intermediate crude oil, the U.S. benchmark, will average $58.70 a barrel in 2009, the Energy Department said yesterday in its Short-Term Energy Outlook. The forecast is up 14 percent from $51.70 estimated in May. Crude oil averaged a record $99.57 in 2008. Gasoline Demand Gasoline demand in the U.S. will rise to an average 9.09 million barrels a day during the summer, 0.9 percent higher than the same period in 2008. Gasoline for July delivery rose .92 cents, or 0.47 percent, to $1.9759 a gallon in New York at 9:29 a.m. Sydney time. Yesterday, it gained 3.07 cents, or 1.6 percent, to end the session at $1.9667, the highest settlement since Oct. 9. World oil consumption will increase 10,000 barrels from the May forecast to an average of 83.68 million barrels a day this year, the EIA said. The estimate is 1.75 million barrels a day lower than demand in 2008. Brent crude for July delivery rose as much as 63 cents, or 0.9 percent, to $70.25 a barrel on London’s ICE Futures Europe exchange. It was at $70.10 at 12:16 p.m. Singapore time. The contract rose $1.74, or 2.6 percent, to end the session at $69.62 a barrel, the highest settlement since Oct. 21.

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