Oil rose in New York, heading for a 1.3 percent gain this week, on speculation that the global economic recovery will sustain demand for crude. Futures advanced as much as 0.7 percent as Group of Eight leaders said the world economy is gaining strength and as a weakening dollar boosted the appeal of commodities. The Organization of Petroleum Exporting Countries may raise production quotas to meet global demand, according to JPMorgan Chase & Co. “I am positive on the oil market for the rest of the year,” said Tetsu Emori, a commodity fund manager at Astmax Co. in Tokyo, who predicts prices may rise to about $115 to $120 a barrel. “The market consensus is that the weaker dollar could be sustaining the dollar-denominated commodities.” Crude for July delivery increased as much as 67 cents to $100.90 a barrel in electronic trading on the New York Mercantile Exchange, and was at $100.79 at 2:48 p.m. Singapore time. Futures yesterday fell $1.09 to $100.23, the lowest settlement since May 24. Prices are up 1.3 percent this week and 10 percent this year. Brent oil for July settlement gained 24 cents, or 0.2 percent, to $115.29 a barrel on the London-based ICE Futures Europe exchange. The contract yesterday rose 12 cents, or 0.1 percent, to $115.05, the highest closing price since May 10. ‘Gaining Strength’ Futures slumped yesterday after a report showing U.S. gross domestic product expanded at a 1.8 percent annual rate in the first quarter, slower than the 2.2 percent estimated in a Bloomberg News survey of economists. Initial jobless claims unexpectedly rose last week. The dollar weakened to $1.4238 against the euro, from $1.4145 in New York yesterday, before reports economists said will show U.S. consumer spending slowed. That increased the appeal of commodities priced in the U.S. currency. Group of Eight leaders, meeting at a two-day summit that ends today in Deauville, France, said a strengthening global economy will pave the way to cuts in the debt built up in the recession that followed the 2008 financial crisis. “The global recovery is gaining strength and is becoming more self-sustained,” according to a draft statement prepared for the leaders. U.S. Driving Season Gasoline for June delivery increased 0.92 cent, or 0.3 percent to $3.0575 a gallon on the Nymex, and is headed for its first weekly gain since April. This weekend’s three-day Memorial Day holiday period is the traditional kickoff of the summer driving season. “Gasoline demand and inventory levels could be the most important drivers of the oil market for the rest of the summer,” Astmax’s Emori said. U.S. gasoline inventories rose 3.79 million barrels to 209.7 million, a seven-week high, the Department of Energy said May 25. Supplies increased as imports surged 68 percent to 1.45 million barrels a day, the most since October 2008. “Trading volumes are expected to remain light,” said Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd. in an e-mailed note today. “The accompanying weaker U.S. dollar, as well as resilient refined products futures, continued to be supportive.” OPEC Quotas The Organization of Petroleum Exporting Countries is likely to increase production quotas to between 27 million barrels and 27.5 million barrels a day when it meets in Vienna June 8, JPMorgan said in a report e-mailed today. Goldman Sachs Group Inc. boosted its 12-month prediction for Brent crude to $130 a barrel from $107, analysts led by Jeffrey Currie said in a report on May 23. Morgan Stanley raised its estimate by 20 percent to an average $120 this year and by 24 percent to $130 in 2012. Crude may rise next week after Goldman and Morgan Stanley increased their price projections, a Bloomberg News survey showed. Fourteen of 36 analysts, or 39 percent, forecast oil will climb through June 3. Twelve respondents, or 33 percent, predicted prices will decline and 10 estimated little change. Last week, 42 percent of respondents said futures would gain. Brent has advanced 22 percent this year as unrest in the Middle East and North Africa toppled leaders in Tunisia and Egypt and spread to Libya, Iran and Syria. Hundreds of Yemeni families fled gun battles in the capital and the U.S. State Department urged Americans to leave the country while commercial transportation is available. To contact the reporters 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: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net

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