Nov. 3 (Bloomberg) -- Crude oil rose to a six-month high after the dollar fell and U.S. stocks rallied on expectations the Federal Reserve will take measures to spur the economy. The Fed will likely start a new round of stimulus today, announcing a plan to purchase at least $500 billion of long-term securities, according to economists surveyed by Bloomberg News. Analysts predict the Republicans will take control of the U.S. House with polls showing Americans are frustrated with the slow pace of economic recovery and a 9.6 percent unemployment rate. "The major impetus taking over the equities and the price of oil is the coming report" from the Fed, Mike Sander, of Sander Capital Advisors in Seattle, wrote in an e-mailed note. "A changing of the guard from Democrat to Republican could be helping to boost equities and the price of oil." Crude for December delivery advanced for a third day, climbing as much as 60 cents, or 0.7 percent, to $84.50 on the New York Mercantile Exchange, the highest since May 4. It was at $84.47 at 10:57 a.m. in Sydney. Oil closed at $83.90 yesterday, the highest since May 3, and has risen 6.1 percent the past year. The Fed, meeting in Washington today, is expected to announce a program of securities purchases to stimulate growth, reduce unemployment and increase inflation, said 53 of 56 economists surveyed by Bloomberg News. Crude has risen as the dollar's fall increased the appeal of commodities as an alternative investment. The dollar declined against most its major counterparts yesterday, falling 1 percent to $1.4034 per euro in New York, from $1.3893. The dollar traded at $1.4044 per euro at 10:41 a.m. Sydney time. Commodity Inflation The Dollar Index, which tracks the U.S. currency against six major peers, fell 0.8 percent to 76.686 in New York yesterday, the lowest level in two weeks. "The bulls have the dollar working in their favor," said Peter Beutel, president of Cameron Hanover Inc., a trading- advisory company in New Canaan, Connecticut. "It looks like commodity inflation will be the name of the game as the economy recovers." The Thomson Reuters/Jefferies CRB Index of 19 commodities advanced 1.1 percent to 304.98, the strongest level in two years. Sixteen of the commodities increased. Investors awaited the Federal Reserve's plan and election results that may result in a Republican takeover of the House that would break the control the Democrats have enjoyed since President Barack Obama won the White House in 2008. 'Abundant Stocks' ''These elements gain importance when there's not a lot changing in terms of fundamentals,'' said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. "We've still got abundant stocks we've been talking about and not a lot has changed on that front. We expect to see some tightening in the oil market going forward and once we start to see that the markets will look to that more heavily." The price of Brent oil in London may rise above $90 a barrel by the end of the year because of the quantitative easing, or asset-purchase, program in the U.S., according to a report yesterday by Francisco Blanch, head of global commodity research at Bank of America Corp.'s Merrill Lynch unit in New York. Brent crude for December settlement gained 79 cents, or 0.9 percent, to $85.41 a barrel yesterday on the London-based ICE Futures Europe exchange, the highest level since May 4. "With oil demand on a robust upward trend, winter weather around the corner and more QE ahead, we believe global oil demand is set to hit a new record in 2011," Blanch said in the report. Brent could top $90 if the Fed decides on an asset purchase program of $500 billion or more, he said. Demand Forecast The International Energy Agency raised its demand forecasts for this year and next by 300,000 barrels a day each last month, citing increased consumption in industrialized nations. Global oil use will increase 1.5 percent in 2011 to 88.2 million barrels a day and by 2.5 percent this year to 86.9 million. Demand contracted in 2008 and 2009. A government report is forecast to show that U.S. supplies of distillate fuel, including diesel and heating oil, are at their lowest level since July. Inventories probably declined 1 million barrels last week, according to the median of 17 analyst responses in a Bloomberg News survey before today's Energy Department report. All those surveyed said supplies would fall. U.S. crude stockpiles probably increased 1.5 million barrels, the survey showed. They rose 5.01 million barrels to 366.2 million, the highest level since July and 13 percent above the five-year average. --With assistance from Mark Shenk, Rita Nazareth and Whitney Kisling in New York, Grant Smith in London and Barbara Powell in Dallas. Editors: John Viljoen, Clyde Russell

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