By Grant Smith Aug. 4 (Bloomberg) -- Crude oil fell from a seven-week high on speculation that gains of 13 percent in the past three days weren’t supported by an improvement in demand. Crude stockpiles in the U.S., the world’s biggest energy consumer, probably increased for a second week, according to a Bloomberg News survey before tomorrow’s Energy Department report. Oil futures declined as equity indexes slipped in Europe, where the Stoxx 600 dropped 0.7 percent. “The actual situation in the oil market doesn’t justify levels about $70,” said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. “Inventories are high, demand is still really weak, the risk is increasing we see a bigger correction towards $60.” Crude oil for September delivery fell as much as $1.30, or 1.8 percent, to $70.28 a barrel on the New York Mercantile Exchange. It was at $70.74 a barrel at 12:36 p.m. London time. Yesterday, futures rose $2.13, or 3.1 percent, to $71.58, the highest settlement since June 12. Prices have climbed 58 percent this year. Kuwait expects oil prices to stay between $70 and $80 a barrel until the end of this year on optimism about a global economic recovery, state-run KUNA news agency cited the country’s oil minister as saying. Crude prices reflect optimism about financial markets and the return of many companies to profitability, Sheikh Ahmed Abdullah al-Sabah said in Rome, according to KUNA. Crude Inventories U.S. crude inventories probably rose 1.15 million barrels in the week ended July 31, according to the median of 12 estimates by analysts surveyed by Bloomberg News. Nine of those surveyed said stockpiles rose and three forecast a drop. Gasoline supplies probably fell 1.25 million barrels from 213.1 million the week before, according to the survey. “Investors seem to be betting on a V-shaped recovery without giving much thought to a scenario where the economy bumps along the bottom for months at a time,” said Edward Meir, an analyst at MF Global Ltd. in Connecticut. “These worries will inevitably resurface.” Oil gained 13 percent in the three trading sessions between July 30 and Aug. 3. The Institute for Supply Management said yesterday its manufacturing index climbed to 48.9 last month from 44.8 in June and CLSA Asia-Pacific Markets said its index of China’s manufacturing rose to a one-year high. China accounts for about 45 percent of Asia’s oil use. The Standard & Poor’s 500 Index climbed above 1,000 for the first time since November, prompting speculation raw-material demand and prices will increase. The index added 1.5 percent to 1,002.63 in New York, the highest level since President Barack Obama was elected on Nov. 4. Brent crude oil for September settlement dropped as much as $1.31, or 1.8 percent, to $72.24 a barrel on London’s ICE Futures Europe Exchange. It was at $72.86 a barrel at 12:24 p.m. in London. To contact the reporters on this story: Ann Koh in Singapore at akoh15@bloomberg.netGrant Smith in London at gsmith52@bloomberg.net

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