Oil rose from the lowest in almost four months in New York after the International Energy Agency increased its oil demand forecast for the next five years. Futures climbed as much as 1 percent as the IEA raised its forecast for global oil demand to 1.3 percent annually for the next five years on economic growth in China. Crude fell earlier, extending yesterday’s 4.6 percent slide, as European equities declined and the euro weakened against the dollar amid signs that the region’s debt crisis is worsening. “Oil has risen after the IEA increased its oil demand forecast,” said Alexander Poegl, an analyst at JBC Energy GmbH in Vienna. “It is also rebounding after yesterday’s strong decline.” Crude for July delivery was up 21 cents at $95.02 a barrel in electronic trading on the New York Mercantile Exchange at 12:51 p.m. London time, after rising as high as $95.75. The contract yesterday fell $4.56 to $94.81, the lowest close since Feb. 22. Brent oil for August delivery rose 63 cents, or 0.6 percent, to $113.64 a barrel on the London-based ICE Futures Europe exchange. It fell $6.34 yesterday to $113.01. Oil consumption will increase to 95.3 million barrels a day in 2016 from 88 million barrels a day in 2010, with China accounting for about 41 percent of the gain, the IEA said in its Medium-Term Oil Market Report today. China Demand The agency also cautioned that gains in prices threaten the recovery. Crude prices are “weighing” on the developed nations that make up the Organization for Cooperation and Development, the Paris-based adviser to oil-consuming nations said. China’s demand growth may keep Brent crude “well above” $100 a barrel in the second half of the year, Gordon Kwan, head of regional energy research at Mirae Asset Securities Ltd. in Hong Kong, said in an e-mailed note today. The euro fell for a second day to a three-week low of $1.4074 after Het Financieele Dagblad, a Dutch newspaper, cited European Central Bank Governing Council member Nout Wellink as saying the region’s emergency fund should be doubled. The currency was also dragged lower on concern a reshuffling of Greek Prime Minister George Papandreou’s cabinet will lead to a renegotiation of aid terms. A stronger dollar typically makes commodities less attractive as an investment. Papandreou is seeking to win a confidence vote as violence erupted over budget cuts and austerity measures needed for international aid. German Chancellor Angela Merkel and French President Nicolas Sarkozy will meet tomorrow in Berlin, with pressure increasing for the leaders to reach an accord on a rescue package for Greece. Oil fell yesterday as manufacturing in the New York region unexpectedly shrank in June and the Energy Department said U.S. fuel demand fell for the first time in five weeks. The Federal Reserve Bank of New York’s general economic index dropped to minus 7.8, the lowest level since November, from 11.9 in May. Readings greater than zero signal expansion in the so-called Empire State Index, which covers New York, northern New Jersey and southern Connecticut. To contact the reporter on this story: Ayesha Daya in Abu Dhabi at adaya1@bloomberg.net. To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net.

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