Crude oil rose, reversing earlier losses, as the dollar fell against the euro, increasing the appeal of commodities as an investment to hedge against inflation. The euro extended this week’s gain versus the dollar before a U.S. report that economists said will show the world’s largest economy shrank at a slower rate last quarter, spurring demand for higher-yielding assets. OPEC member nations are deepening their output cuts to support prices. An Energy Department report today will probably show U.S. stockpiles gained. “Oil is holding around $50 despite expectations for another crude stock build today,” said Christopher Bellew, senior broker at Bache Commodities Ltd. “The weaker dollar must help a bit, but I suspect that people are filling inventories because of the low cost of borrowing.” Crude oil for June delivery rose as much as $1.04, or 2.1 percent, $50.96 a barrel in electronic trading on the New York Mercantile Exchange. It traded at $50.89 at 11:01 a.m. London time. The contract earlier fell as much as 80 cents, or 1.6 percent, to $49.12 a barrel. Prices are up 14 percent this year. An Energy Department report later today will probably show that U.S. crude oil stockpiles rose by 1.8 million barrels last week, according to the median of 14 analyst responses in a Bloomberg News survey. Supplies climbed to 370.6 million barrels in the week ended April 17, the highest since September 1990. The API report, released after the end of floor trading yesterday, showed supplies rose to 374.8 million last week. OPEC Cuts Gasoline stockpiles increased 200,000 barrels from 217.3 million the prior week, according to the Bloomberg survey. Inventories of distillate fuel, a category that includes heating oil and diesel, rose 1 million barrels from 142.3 million. Brent crude for June settlement was at $50.71 a barrel, up 72 cents, at 10:21 a.m. London time on London’s ICE Futures Europe exchange. The contract earlier fell as much as 74 cents, or 1.5 percent, to $49.25 a barrel. Members of the Organization of Petroleum Exporting Countries are still trying to support prices through their output reductions. The group agreed to slash production by 4.2 million barrels a day from September levels. Abu Dhabi National Oil Co., based in the United Arab Emirates, told refiners in Asia yesterday that it was cutting June supplies for its Murban, Lower Zakum and Umm Shaif grades by 18 percent, more than the 15 percent in May. Their Upper Zakum type would be slashed by 16 percent, up from 10 percent. The dollar weakened 1 percent to $1.3236 per euro, bolstering the appeal of commodities priced in the U.S. currency that can be used to hedge against inflation.

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