Oil rose to a six-month high in New York after the Federal Reserve said it will expand record measures to spur the economy in the U.S., the world’s biggest crude consumer. Prices climbed for a fourth day, the longest rising streak since September, as the Fed’s measures weakened the dollar and boosted investor demand for commodities. The central bank yesterday said it will buy an additional $600 billion of Treasuries through June. U.S. gasoline stockpiles fell last week to the lowest in almost a year, according to government data. “The rally will go on a little bit; there’s certainly the potential to go above $90,” said Gerrit Zambo, a trader at Bayerische Landesbank in Munich. “Of course it’s a reaction to the Fed decision to flood the market with liquidity. It was more than the market was expecting, so everything is positive.” Crude for December delivery rose as much as $1.36, or 1.6 percent, to $86.05 a barrel in electronic trading on the New York Mercantile Exchange. That’s the highest intraday price since May 4. The contract was at $85.71 at 11:47 a.m. London time. Brent crude for December settlement rose as much as $1.21, or 1.4 percent, to $87.59 a barrel on the ICE Futures Europe exchange in London. New York prices are in the longest rally since a four-day run through Sept. 27. Futures are up 8.1 percent this year. The dollar reached $1.4264 against the 16-nation euro today, the lowest since Jan. 20. The U.S. currency’s decline bolsters the appeal of commodities as an inflation hedge. Record Stimulus Oil has advanced 5.3 percent this week as investors bet that the record stimulus, aimed at reducing unemployment and averting deflation, will weaken the dollar. Yesterday, the contract gained 1.1 percent to $86.38, the highest settlement since May 4. Fed policy makers, after a two-day meeting in Washington yesterday, said progress has been “disappointingly slow” in bringing down joblessness from a 26-year high. The central bank left unchanged its pledge to keep interest rates near zero for an “extended period.” Oil may soar to more than $100 a barrel as nations turn to commodities as a refuge from the currency markets, according to analysts at Inenco Group Ltd., a London-based energy consultant. “The falling value of the currency means that producing nations need to see the price per barrel rising just so they can stand still in terms of revenue,” Ian Parrett, an Inenco analyst, said today. “If more nations turn to oil as a refuge from the currency markets, whilst the value of the dollar continues to slide under monetary policy, it’s hard to accurately peg how high the price of oil could rise.” Gasoline Supplies U.S. gasoline inventories dropped 2.69 million barrels in the week ended Oct. 29 to 212.3 million, the Energy Department reported yesterday. That’s the lowest level since Nov. 20 last year, leaving supplies 6 percent above the five-year average. Distillate-fuel stockpiles, including heating oil and diesel, fell for a sixth week as imports declined 3.57 million barrels to 164.9 million, the Energy Department said. That’s the biggest drawdown since the week to April 3, 2009. “It is still accurate to say that inventories appear to have peaked,” Peter Beutel, president of energy adviser Cameron Hanover Inc. in New Canaan, Connecticut, said in a note. The data “showed larger-than-expected drawdowns in distillate and gasoline stocks.” Commercially held crude inventories increased 1.95 million barrels last week to 368.2 million, as refiners cut operating rates to the lowest since March, the report showed. Supplies were forecast to gain 1.5 million, according to the median estimate from 17 analysts surveyed by Bloomberg News. To contact the reporter on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net Grant Smith in London at gsmith52@bloomberg.net To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net

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