Oil advanced amid speculation that the European Central Bank may alleviate the region’s sovereign debt crisis, boosting growth and fuel demand. Futures gained as much as 1.3 percent after a euro-region central bank official, who declined to be identified, said policy makers are likely to debate the resumption of covered- bond purchases next week. Earlier, oil plummeted to the lowest level since Aug. 9 on concern the crisis could trigger another recession as Greece teeters on the brink of default. “There’s some talk that the European policy makers are putting together some new measures to ease the region’s debt crisis and that’s making the markets a little more stable,” said Tom Bentz, a broker with BNP Paribas Commodity Futures Inc. in New York. “The markets are still worried about the whole economic picture and a Greek default.” Crude for November delivery rose 43 cents, or 0.5 percent, to $80.28 a barrel at 11:52 a.m. on the New York Mercantile Exchange. It ranged from $77.11 to $80.85. Oil has fallen 12 percent this year. Brent futures for November settlement rose 58 cents, or 0.6 percent, to $104.55 a barrel on the London-based ICE Futures Europe exchange. The reintroduction of 12-month loans to banks will be discussed at the ECB’s Oct. 6 policy meeting, according to the central bank official, who spoke on condition of anonymity because the information is confidential. Interest-rate cuts are likely to be discussed, though they are not on the current agenda, the official said. Euro, Commodities The euro traded at $1.3507 in New York, little changed from $1.35 on Sept. 23. Earlier, it touched $1.3363, the lowest level since Jan. 18. A weaker euro curbs the appeal of commodities as an alternative investment to the U.S. dollar. The Standard & Poor’s GSCI Index of 24 commodities gained 0.3 percent to 601.28. Earlier, it touched 583.68, the lowest intraday level since Dec. 1. Metals including zinc, lead, gold and copper led the decliners. “The market is biding its time before some news comes that will get it moving again,” said Peter Beutel, president of trading advisory company Cameron Hanover Inc. in New Canaan, Connecticut. “There’s a little optimism in Europe, optimism that they are getting a new Greek package together. It’s not enough to get this market to move around strongly.” The European financial crisis and general fears about the global economy have weakened demand for crude, Qatari Oil Minister Mohammed Saleh al Sada said yesterday in Doha. U.S. Home Sales Purchases of new houses in the U.S. declined in August as the biggest drop in prices in two years failed to lure buyers away from even less expensive distressed properties. Sales, tabulated when contracts are signed, dropped 2.3 percent to a 295,000 annual pace, figures from the Commerce Department showed today in Washington. The median estimate of 73 economists in a Bloomberg News survey called for a decline to 293,000. The median price slumped 7.7 percent from August 2010, the steepest 12-month drop since July 2009. “People are scared,” said Phil Flynn, vice president for research at PFGBest in Chicago. “Oil is acting weak right now but if the European situation gets settled, I think oil will go back up. The housing numbers were weak. We were trying to get optimistic and then were blinded by a bad economic number.” Saudi Arabia, the world’s largest crude exporter, may cut production to prevent prices falling below $90 a barrel in London, according to HSBC Holdings Plc. “If the world economy manages to generate some growth, albeit it at a slower pace, we would expect oil prices to remain well supported above $90 to $100” for Brent crude, said Amrita Sen, a commodities analyst at Barclays Plc in London. To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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