Oil traded near a seven-week high after a U.S. government report showed an unexpected decline in gasoline supplies as refiners cut operating rates to the lowest level since April. Futures are headed for their biggest monthly gain in seven. Prices rose 2.2 percent yesterday after the Energy Department said stockpiles of the fuel fell 3.47 million barrels to 222.6 million last week. They were forecast to increase 350,000 barrels, according to a Bloomberg News survey. Crude inventories also slipped. “The draws in crude stocks, as well as the products, is seen as a particularly good sign because we’re moving into the season where refineries close for maintenance,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “If you’re focusing on the U.S. and the emerging economies, the past week has started to look a little better.” The November contract was at $77.66 a barrel, down 20 cents, in electronic trading on the New York Mercantile Exchange at 2:04 p.m. Singapore time. Yesterday, it added $1.68 to settle at $77.86, the highest settlement since Aug. 11. Prices are 2 percent lower this year. Futures have climbed 8 percent in September, the biggest gain since February, and are headed for a 2.7 percent increase in the third quarter. Oil also increased as the dollar fell to an eight-month low against a basket of currencies. The U.S. currency traded little changed at $1.3617 a euro after dropping 0.3 percent yesterday. A weaker dollar bolsters the appeal of commodities as an alternative investment. Refinery Capacity The Energy Department said refineries ran at 85.8 percent of capacity last week, down from 87.8 percent the prior week. That’s the lowest level since April 16. Refiners typically take units down for maintenance in the fall and spring, before the peak fuel-demand seasons. Stockpiles of distillate fuel, which includes heating oil and diesel, declined 1.27 million barrels to 173.6 million. They were forecast to increase by 325,000 barrels, according to a Bloomberg News survey. Oil inventories slipped 475,000 barrels to 357.9 million, the Energy Department report showed. Supplies were forecast to drop 700,000 barrels. Brent crude for November delivery traded at $80.56 a barrel, down 21 cents, on the London-based ICE Futures Europe exchange. Yesterday it gained $2.06, or 2.6 percent, to $80.77, the highest level since Aug. 9. To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Ann Koh in Singapore at akoh15@bloomberg.net To contact the editor responsible for this story: Jane Lee in Kuala Lumpur at jalee@bloomberg.net

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