Oil rose in New York, heading for a second weekly gain on speculation Europe may contain its debt crisis and that the U.S. economy will recover, bolstering demand for raw materials. Prices rose as much as 1.9 percent, rallying with equity markets as Group of 20 and International Monetary Fund officials said the fund may increase its lending resources to help stem the European debt crisis. Commerce Department data today may show U.S. retail sales last month climbed at the fastest pace in six months, according to a Bloomberg survey of economists. Technical indicators showed New York crude was oversold. “The talk of recession is quieter,” said James Zhang, a strategist at Standard Bank Plc in London, who forecasts Brent will average $98 a barrel in the fourth quarter. “And the oil market itself has grown surprisingly tight. Inventories are very low, at least in Europe, as supplies are not coming back fast enough and, despite all the talk of slowdown, demand seems to be holding up.” Crude for November delivery climbed as much as $1.61 to $85.84 a barrel in electronic trading on the New York Mercantile Exchange. It was at $85.54 at 10:46 a.m. London time. The contract fell 1.6 percent yesterday to the lowest close since Oct. 7. Prices are down 6.4 percent this year and up 3.1 percent for the week. Brent oil for November settlement rose $2.06, or 1.9 percent, to $113.17 a barrel on the London-based ICE Futures Europe exchange. The European benchmark future, which expires today, reached a record premium of $27.70 a barrel to U.S. crude earlier today. The more-active December contract was up $1.17 at $111.17. IMF Resources Policy makers are discussing an expansion of the IMF’s lending powers as part of a global G-20 agreement next month in Cannes, France, according to three officials who declined to be named because the discussions are not public. Talks may depend on measures Europeans take to end the debt turmoil at an Oct. 23 summit, they said. Oil is also rising in New York as stochastic oscillators on the weekly technical chart show futures remain oversold, according to data compiled by Bloomberg. The price advance may continue, with prices rising as high as $88.86 a barrel, the lower of two leading-span lines that define a so-called “ichimoku cloud” on the weekly chart. The cloud is an area where buy orders may be clustered. U.S. retail sales may have climbed 0.7 percent in September, according to a Bloomberg News survey of economists before today’s report. That’s up from little changed in August. “The oil markets moving up or pulling down is dependent on the stock and financial markets,” said Ken Hasegawa, a commodity derivatives trading manager at broker Newedge in Tokyo. “Some of the U.S. data has been good recently. I don’t think the markets will move up sharply as there is still a lot of fear.” To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net

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