June 10 (Bloomberg) -- Crude oil rose to a seven-month high after an industry group reported U.S. stockpiles dropped and the dollar dropped against the euro, bolstering the appeal of energy as an alternative investment. Crude climbed past $71 a barrel on expectations the dollar may extend its decline as investors turn from treasuries to other asset classes including commodities. Yesterday, the American Petroleum Institute said crude oil supplies fell 5.96 million barrels to 357.9 million last week, the lowest since March. The Department of Energy will report their data today. “Sentiment for oil is buoyant,” said Andrey Kryuchenkov, an analyst with VTB Capital in London. “Investors are seeing more green shoots as macro data gradually improves, and with the weaker dollar stoking long-term concerns about inflation they’re opting for commodities.” Crude oil for July delivery rose as much as $1.64, or 2.3 percent, to $71.65 a barrel in electronic trading on the New York Mercantile Exchange, the highest since Nov. 4. It was at $71.40 a barrel at 10:18 a.m. London time. 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. The euro may gain for a second day today after Goldman Sachs Group Inc. recommended clients buy the currency. The dollar traded at $1.4137 against the euro at 9:21 a.m. in London. “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.” The U.S. Energy Department will probably report later today 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 preemptive market that is buying on any sort of positive news.” 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. ‘Killing Zone’ “It’s really a killing zone on fundamentals for oil.” Johannes Benigni, chief executive officer of JBC Energy GmbH in Vienna, said in a Bloomberg Television interview. “On the gasoline front demand is not picking up. Refinery margins are horrifying. In July, we would see potential to go close to $50 or even slightly below $50.” 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. Brent crude for July delivery rose as much as $1.37, or 2 percent, to $70.99 a barrel on London’s ICE Futures Europe exchange, the highest since Nov. 5. It was at $70.88 at 9:18 a.m. London time. The contract rose yesterday $1.74, or 2.6 percent, to end the session at $69.62 a barrel.

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