Crude oil rose to the highest level in a month and gasoline surged 8 percent as equities advanced and U.S. stockpiles of the motor fuel dropped because of strengthening demand. Oil climbed as much as 6.1 percent as U.S. stocks climbed after President Barack Obama’s budget proposed new aid for the financial industry. Gasoline supplies declined 3.32 million barrels last week and consumption increased 1.2 percent, an Energy Department report showed yesterday. “It makes sense that the oil market is trading with equities because they are a leading indicator of economic growth,” said Bill O’Grady, chief markets strategist at Confluence Investment Management in St. Louis. “You are starting to get an improvement in gasoline demand.” Crude oil for April delivery increased $2.23, or 5.3 percent, to $44.73 a barrel at 10:22 a.m. on the New York Mercantile Exchange. Futures touched $44.78, the highest since Jan. 27. Prices are up 7.4 percent this month and 0.4 percent this year. Gasoline futures for March delivery increased 7.53 cents, or 6.5 percent, to $1.242 a gallon in New York. The contract reached $1.2634, the highest since Feb. 12. The average U.S. pump price for regular gasoline dropped 0.9 cent to $1.882 a gallon yesterday, AAA, the nation’s largest motorist organization, said on its Web site. Prices have declined 54 percent from the record $4.114 a gallon reached in July. U.S. gasoline consumption averaged 9 million barrels a day over the past four weeks, up 1.7 percent from a year earlier, yesterday’s report showed. Lower Prices “Prices are very low compared to where they were six months ago,” O’Grady said. “The improvement in gasoline demand is being driven more by lower prices than any economic recovery.” The Dow Jones Industrial Average increased 63.16 points, or 0.9 percent, to 7,334.05. The Standard & Poor’s 500 Index rose 7.09 points, or 0.9 percent, to 771.99. Crude oil supplies rose 717,000 barrels to 351.3 million barrels last week, the department said yesterday. Inventories were forecast to increase by 1.25 million barrels, according to the median of responses in a Bloomberg News survey. In January stockpiles increased by a weekly average 5.46 million barrels. Imports dropped 0.3 percent to 8.77 million barrels a day, the lowest since September, when ports were shut in the aftermath of hurricanes Gustav and Ike, the report showed. OPEC Production OPEC agreed on Dec. 17 to reduce oil supplies starting Jan. 1 to bolster prices. The 11 members of the Organization of Petroleum Exporting Countries with quotas, all except Iraq, cut output 3.8 percent to 25.3 million barrels a day in February, consultant PetroLogistics Ltd. of Geneva said Feb. 23. Members have a quota of 24.845 million barrels a day. Iran, Venezuela and Iraq said last week that OPEC is prepared to cut production again when it meets on March 15. “U.S. crude-oil supplies aren’t building like they were and it appears that the OPEC cuts are translating into lower U.S. import levels,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York. Abu Dhabi National Oil Co. will reduce exports of crude oil in April. The United Arab Emirates state-owned producer will export 17 percent less of Upper Zakum crude oil than contracted, following a 15 percent reduction in March, the company said in a faxed statement today. Shipments of Umm Shaif, Lower Zakum and Murban crude will be cut by 15 percent. Brent crude oil for April settlement increased $1.45, or 3.3 percent, to $45.74 a barrel on London’s ICE Futures Europe exchange. Futures reached $45.88, the highest since Feb. 13.

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