Crude oil rose for a third day in New York as the dollar dropped against the euro, bolstering the appeal of commodities as a currency hedge. Oil rebounded after the U.S. Energy Department reported yesterday that crude stockpiles rose for a seventh week to the highest since September 1990. The U.S. currency dropped the most in a week against the Euro, increasing demand for crude as a defense against rising inflation. “The market is reacting to the weaker dollar,” said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich AG in Vienna. “This is desperately needed after yesterday’s bearish inventory data. And the market is drawing support from the fact that European equities are not down so much as they were earlier.” Crude oil for June delivery rose as much as 80 cents, or 1.6 percent, to $49.65 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $49.64 at 12:09 p.m. London time. The euro rose against the yen and the dollar after a report showed an index of European services and manufacturing industries increased more than economists expected, adding to evidence the region’s slump is easing. The common European currency traded at $1.3024, from $1.3005, after falling as low as $1.2980. Europe’s Dow Jones Stoxx 600 Index was little changed at 192.43 as of 11:25 a.m. in London, after declining as much as 1 percent earlier. “For now the oil market will remain buffeted between bearish fundamentals and bouts of optimism coming from the equity markets,” said Harry Tchilinguirian, senior oil market analyst at BNP Paribas SA in London. “The surplus in U.S. crude inventories is quite certain.”

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