Oil rose from a six-week low in New York as investors speculated the biggest weekly drop in almost two months is exaggerated while central bankers from the Group of 20 pledged to address rising risks to the global economy. Futures climbed as much as 1.6 percent after plunging 6.3 percent yesterday. Finance chiefs from the Group of 20 said they would address “heightened downside risks” from sovereign debt and slowing growth. OPEC said it will decide whether to cut supply after monitoring the global economy over the next two months and the pace of Libya’s production recovery. “After such a big move often there are shorts that are looking to take a profit,” Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty Ltd. in Sydney, said by telephone. “We haven’t seen any evidence yet of people getting aggressively into oil. The macro situation is also a very poor backdrop for oil at the moment.” Crude oil for November delivery climbed as much as $1.30 to $81.81 a barrel in electronic trading on the New York Mercantile Exchange and was at $80.76 at 2:46 p.m. Sydney time. The contract yesterday decreased $5.41 to $80.51, the lowest settlement since Aug 9. Prices are down 8 percent this week and up 7 percent the past year. Brent oil for November settlement gained 63 cents, or 0.6 percent, to $106.12 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at premium of $25.36 to U.S. futures, compared with a record $26.87 on Sept. 6, based on November settlement prices. Relative Strength Shorting crude involves selling futures contracts in the expectation that they will decline in value. Traders book a profit when they buy contracts at a lower price to offset the open position. Oil in New York also rebounded as a technical indicator signaled futures may have fallen too far. Crude dropped below its lower Bollinger Band for the first time in more than six weeks, according to data compiled by Bloomberg. This indicator is at $81.48 a barrel today. Bollinger Bands plot support and resistance levels based on volatility and are used by investors to determine entry points for buying or selling contracts. Saudi Arabia will probably maintain current production rates so long as economic woes in Europe and the U.S. don’t spread to emerging nations where consumption grows faster, said an official from one of the Organization of Petroleum Exporting Countries’ 12 members, who is not authorized to speak publicly and declined to be identified by name. Goldman Forecast Goldman Sachs Group Inc. lowered its three-month forecast for oil in New York by 15 percent to $97.50 a barrel. The bank’s previous target was $115 a barrel, analysts led by Samantha Dart in London said in a report yesterday. “It’s all about a lack of confidence,” Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney, said by telephone today. “It’s going to get a little bit darker before the dawn.” Oil options volatility surged to the highest in six weeks. Implied volatility for at-the-money options expiring in November, a measure of expected price swings in futures and a gauge of options prices, was 51.4 percent at 2 p.m. in New York, the highest for the contract nearest to expiration since Aug. 10. To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at akwiatkowsk2@bloomberg.net

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