By Gavin Evans April 5 (Bloomberg) -- Crude oil rose to a 17-month high on speculation global fuel demand will increase as the world economy recovers from recession. Oil climbed before a report today that may show service industries in the U.S., the world’s largest energy consumer, expanded in March at the fastest pace since 2007, based on a Bloomberg survey of economists. Prices have established a floor of $75 a barrel, according to Venezuela’s Oil Minister Rafael Ramirez. There’s no need for the Organization of Petroleum Exporting Countries to increase production, he said. “Economic data indexes are getting better and that is supporting crude oil prices,” said Ken Hasegawa, energy trading manager at broker Newedge in Tokyo. “Still, we need time to see quite a strong economic recovery” and prices may struggle above $87 without further evidence of growth, he said. Crude oil for May delivery rose as much as $1.02, or 1.2 percent, to $85.89 a barrel in electronic trading on the New York Mercantile Exchange, the highest since Oct. 9, 2008. The contract was at $85.67 at 12:24 p.m. Singapore time. Futures increased $1.11, or 1.3 percent, to settle at $84.87 on April 1. Prices climbed after reports showed Chinese, European and U.S. manufacturing expanded, while pessimism decreased among Japan’s largest industrial companies. Oil trading resumed today after the exchange closed April 2 to mark the Good Friday holiday. A Labor Department report that day showed the U.S. economy gained 162,000 jobs in March, the most in three years, buoyed by 48,000 temporary workers hired by the government to conduct the census. Investor Confidence Oil traded within a range of $68 to $84 a barrel in the six months ended March 30. Prices climbed the past two months as improved investor confidence lifted world equity markets and U.S. refining climbed from a 16-month low. Still, U.S. crude oil stockpiles have posted nine weekly increases and held 354.2 million barrels in the week ended March 26, 6.5 percent above the five-year average for the period, the Energy Department said last week. OPEC, which pumps about 40 percent of the world’s oil, slashed output in January 2009 to prevent a supply glut. The 12- member group left production quotas unchanged when ministers met March 17 in Vienna. Venezuela, OPEC’s sixth-largest producer, is seeking a price band between $80 and $100 a barrel, Ramirez said April 2 in Caracas. Prices are benefiting from OPEC’s decision to maintain output restrictions, President Hugo Chavez said April 1 on state television. Brent crude oil for May settlement rose as much as 97 cents, or 1.2 percent, to $84.98 a barrel on the London-based ICE Futures Europe exchange. The contract was at $84.71 at 12:18 p.m. Singapore time. --With assistance from Yee Kai Pin in Singapore. Editors: John Viljoen, Alex Devine. To contact the reporter on this story: Gavin Evans in Wellington at gavinevans@bloomberg.net To contact the editor responsible for this story: Jane Lee at jalee@bloomberg.net

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