Crude oil rose after U.S. consumer confidence climbed from an eight-month low and as concern the country will default on its debts sent the dollar lower. Futures increased 0.4 percent as the Conference Board’s index rose to 59.5 in July from a revised 57.6 reading the prior month. President Barack Obama cautioned of a “deep economic crisis” without a compromise to avert an Aug. 2 default. The dollar dropped on the warning, bolstering the appeal of dollar- denominated raw materials such as oil. “The consumer confidence number gave us a good bounce,” said Jason Schenker, president of Prestige Economics LLC in Austin, Texas. “You’re getting a lot of intraday movement but the net change isn’t that great.” Crude oil for September delivery rose 39 cents to settle at $99.59 a barrel on the New York Mercantile Exchange. The contract reached $100.62, the highest intraday price since June 10. Futures have increased 26 percent in the past year. Prices retreated after the American Petroleum Institute reported at 4:30 p.m. that U.S. crude-oil stockpiles climbed 3.96 million barrels to 358.2 million. September oil fell 3 cents to $99.17 a barrel in electronic trading at 4:32 p.m. Brent oil for September settlement climbed 34 cents, or 0.3 percent, to end the session at $118.28 a barrel on the London- based ICE Futures Europe exchange. The European benchmark contract traded at a premium of $18.69 a barrel to West Texas Intermediate, the grade traded in New York, down from a record $22.63 on July 14, based on settlement prices. Dueling Speeches Obama delivered his message last night in a prime-time television address from the White House, a ritual in moments of crisis and national tragedy. Republican House Speaker John Boehner, speaking from the U.S. Capitol, responded that the president “wants a blank check” to continue government spending that is “sapping the drive of our people.” Failure to raise the nation’s $14.3 trillion debt ceiling quickly would act as a new tax on the economy, Alice Rivlin, a White House budget director under President Bill Clinton, said in an interview on Bloomberg Television today. “There’s a new tension to the market,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “The bullish spin is that the debt issue will weaken the dollar and is therefore good for commodities. The bearish spin is that a failure to raise the debt ceiling will be bad for demand and any austerity measures in an agreement will also hurt demand.” New York crude has gained 9 percent this year as the Dollar Index, which tracks the U.S. currency against six trading partners, has declined 7 percent. The dollar fell 1 percent to $1.4517 against the euro, and touched $1.4358, the lowest level since July 5. It slipped to a record low versus the Swiss franc. Commodity Rally The Standard & Poor’s GSCI Index of 24 raw materials rose 0.6 percent to 701.53, the highest level since June 10. Twenty- one of the commodities advanced. “Commodities are going to move higher and the dollar lower until we have clarity about the budget impasse,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “The focus has shifted from the problems in Europe to instability here.” An Energy Department report tomorrow will probably show that U.S. crude oil inventories slipped 2 million barrels, or 0.5 percent, to 349.7 million last week, according to the median of 13 analyst responses in a Bloomberg News survey. It would be the eighth straight fall, the longest stretch of declines in more than three years. Fuel Inventories Gasoline stockpiles increased 400,000 barrels, or 0.2 percent, to 212.9 million in the week ended July 22, the survey showed. Supplies of distillate fuel, a category that includes heating oil and diesel, probably rose 1.63 million barrels, or 1.1 percent, to 150.1 million barrels. Gasoline for August delivery gained 2.72 cents, or 0.9 percent, to settle at $3.1536 a gallon on the Nymex. Prices have risen 50 percent in the past year. Oil volume in electronic trading on the Nymex was 535,400 contracts as of 4:32 p.m. in New York. Volume totaled 409,714 contracts yesterday, the lowest in three months and 39 percent below the average of the past three months. Open interest was 1.5 million contracts, the lowest level since January. “Volume is very low right now, which is adding to the volatility,” Evans said. “It doesn’t take much to move the market now.” To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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