Oil rose a third day, trading at the highest in 12 weeks, on signs of improving U.S. demand and speculation European leaders will agree on a fund to contain the crisis threatening the region’s economic growth. Futures climbed as much as 0.9 percent, extending a gain of more than 20 percent over the past three weeks, entering a so- called bull market. Inventories at Cushing, Oklahoma, the delivery point for New York crude, fell last week, according to a satellite survey. A report today may show U.S. consumer confidence rose a second month, while European leaders meet tomorrow to decide on a blueprint to tame the region’s debt problems. Hurricane Rina headed for Mexican platforms. “People are feeling much less negative,” said Jeremy Friesen, a commodity strategist with Societe Generale SA in Hong Kong. “The U.S. inventory data have been very supportive. As people see more clarity in what’s happening, that should be an environment where investors may buy.” Crude for December delivery gained as much as 80 cents to $92.07 a barrel in electronic trading on the New York Mercantile Exchange and was at $91.64 at 2:15 p.m. Singapore time. The contract yesterday increased $3.87, or 4.4 percent, to $91.27, the highest close since Aug. 3. Futures have risen 21 percent since Oct. 4. A gain of 20 percent meets the common definition of a bull market. December futures were at an 17-cent premium to January. The front-month contract yesterday settled higher than the next month for the first time since Nov. 20, 2008. This so-called backwardation typically signals an increase in near-term demand. Bullish Bets “Risk appetite for commodities has sharply improved,” Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd. in Melbourne, said in a note. “Trade was heavy for U.S. crude, flipping the curve structure into backwardation for the first time since 2008, as market participants took direction from positive developments in Europe and the U.S. and priced-in for tighter supplies.” Brent oil for December delivery was at $111.25 a barrel, down 20 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $19.61 to New York crude, compared with a close of $20.18 yesterday, the smallest difference since July 28. The spread was at a record settlement of $27.88 on Oct. 14. Hedge funds and other money managers increased bullish bets on Brent by 32 percent in the week ended Oct. 18, according to data from ICE Futures Europe. Speculative bets that prices will rise, in futures and options combined, outnumbered short positions by 54,208 contracts, the exchange said yesterday in its weekly Commitment of Traders report. Net-long positions rose by 13,204 contracts, from 41,004 a week earlier. Hurricane Rina Hurricane Rina grew into a Category 1 storm yesterday and was strengthening as it moved toward resorts on Mexico’s Yucatan Peninsula, the U.S. National Hurricane Center said in an advisory at about 11 p.m. New York time. Kinetic Analysis Corp. estimated that the storm may shut in 6.69 million barrels of oil produced by Petroleos Mexicanos, Latin America’s largest oil producer. Oil stockpiles at Cushing dropped 760,000 barrels to 28.1 million, satellite images taken by Longmont, Colorado-based DigitalGlobe Inc. showed. Total U.S. inventories probably climbed 1.75 million barrels last week, according to the median of nine analyst estimates in a Bloomberg News survey before an Energy Department report tomorrow. Supplies in the prior week fell to the lowest since February 2010. The industry-funded American Petroleum Institute will report its own data today. U.S., Europe Crude futures declined the past two months as investors speculated that a slowing U.S. economy and Europe’s debt crisis will curb economic growth and demand for commodities. The Conference Board’s consumer confidence index rose in October to 46 percent, from 45.4 percent, according to a Bloomberg News survey before data from the New York-based group. European leaders return to Brussels tomorrow for their second summit in four days as they seek to agree on a plan to resolve the debt crisis. The European Union accounted for 16 percent of the world’s oil consumption last year, according to BP Plc’s annual Statistical review of World Energy. To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Christian Schmollinger in Singapore at christian.s@bloomberg.net To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net

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