By Grant Smith April 9 (Bloomberg) -- Crude oil rose for the first time in three days in New York amid growing confidence that the economic recovery will stimulate fuel demand. Oil is heading for a second weekly gain as concern over a Greek debt default subsided and U.S. retail sales surged the most in more than a decade. U.S. oil refineries raised operating rates to 84.5 percent of capacity last week, a six-month high, the Energy Department reported on April 7. “There’s still optimism the recovery will continue and that’s what’s playing out in the market, even though fundamentals are not strong enough to justify these levels,” said Hannes Loacker, a Raiffeisen Zentralbank Oesterreich analyst in Vienna. “Product demand remains near a 10-year low but it seems to be getting stronger.” Crude oil for May delivery climbed as much as 98 cents, or 1.2 percent, to $86.37 a barrel in electronic trading on the New York Mercantile Exchange. It was at $86.01 at 12:41 p.m. London time. Brent crude for May settlement was up 87 cents at $85.68 on the London-based ICE Futures Europe exchange. Futures in New York are poised for a 1.4 percent gain this week, after climbing 6.1 percent last week. Oil has gained 8.5 percent this year. March sales at 31 U.S. chain stores gained 9 percent, the largest one-month increase since March 1999, the New York-based International Council of Shopping Centers said yesterday. ‘Encouraging Data’ “We saw some fairly encouraging retail sales data in the U.S. and that seemed to buoy market sentiment,” said Toby Hassall, a research analyst at CWA Global Markets Pty in Sydney. “It’s the latest in a string of encouraging macro data.” Crude oil may decline next week on rising U.S. inventories and as prices near an 18-month high curb demand for fuel, based on a Bloomberg News survey. Twenty of 40 analysts and traders, or 50 percent, forecast oil will drop through April 16. Twelve respondents, or 30 percent, predicted futures will increase and eight said the market will be little changed. Last week, 45 percent of survey respondents said prices would fall. The Organization of Petroleum Exporting Countries is set to keep shipments steady in the four weeks ending April 24, according to tanker-tracker Oil Movements. The 12-member group, which pumps 40 percent of the world’s crude oil, will ship 23.24 million barrels a day in the period, little changed from the month ended March 27, the Halifax, England-based consultant said yesterday. The data exclude Ecuador and Angola. OPEC slashed production by a record 4.2 million barrels a day beginning January 2009 to prevent a supply glut as the global economy sank into recession. Group members left official output quotas unchanged when ministers met March 17 in Vienna. To contact the reporters on this story: Grant Smith in London at gsmith52@bloomberg.net

Source