Oil rose, rebounding from its biggest weekly loss in three months, amid optimism that an agreement to rescue Ireland’s banks may reduce European sovereign-debt concerns. Futures retraced some of last week’s 4 percent slump after Ireland yesterday applied for a bailout from the European Union and the International Monetary Fund to save its banks. The decision pushed the euro to a one-week high versus the dollar, boosting the appeal of commodities to investors. “The euro debt concerns are easing as Ireland has decided to accept the bailout and that will lead to a weaker dollar,” said Serene Lim, a commodity strategist at Australia & New Zealand Banking Group Ltd. in Singapore. “It’s more of the dollar weakening that’s helping to drive oil higher.” The January contract gained as much as 64 cents, or 0.8 percent, to $82.62 a barrel in electronic trading on the New York Mercantile Exchange, and was at $82.50 at 12:25 p.m. Singapore time. It slipped 44 cents, or 0.5 percent, to $81.98 on Nov. 19. Futures are up 3.7 percent this year. The December contract expired on Nov. 19, down 34 cents, or 0.4 percent, at $81.51 a barrel. Crude fell at the end of last week after China ordered banks to raise reserves in a move that may slow growth and crimp fuel demand in the world’s largest energy-consuming country. “The Irish debt situation has been contained for the moment,” said David Taylor, a market analyst at CMC Markets Ltd. in Sydney. Diesel Demand The Dollar Index, which measures the greenback against six major global currencies, fell by 0.5 percent to 78.113. Brent crude for January settlement advanced as much as 69 cents, or 0.8 percent, to $85.03 a barrel, on the ICE Futures Europe exchange in London. The contract dropped 71 cents, or 0.8 percent, to $84.34 on Nov. 19. U.S. diesel consumption increased in October from a year earlier, a signal that the U.S. economy is rebounding, according to the American Petroleum Institute. Demand for ultra-low sulfur diesel, the type used on highways, rose 8.4 percent to average 3.19 million barrels a day last month, the industry-funded group said Nov. 19. Consumption during the first 10 months of this year climbed 2.9 percent to 2.97 million barrels a day. Hedge funds cut bullish bets on oil by the most in almost three months. Large speculators reduced so-called long positions, or wagers on rising prices, by 15 percent in the seven days ended Nov. 16, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report, released Nov. 19. It was the first drop in four weeks and the largest decline since the seven days ended Aug. 24. To contact the reporters on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net; Ben Sharples in Melbourne at bsharples@bloomberg.net To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net

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