Crude rose, recouping part of the biggest loss in eight months, on signs that U.S. fuel stockpiles are shrinking and speculation that China’s economy will continue to drive oil demand. The U.S. Energy Department may report today that gasoline stockpiles fell 1.5 million barrels last week, according to a Bloomberg News survey. Futures rebounded after yesterday’s 4.3 percent decline, the biggest drop since Feb. 4, as concern eased that an unexpected rate increase by China’s central bank will harm fuel consumption in the world’s largest energy user. “China’s demand for oil remains strong and the rate hike is not of a magnitude that would change that,” said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich AG in Vienna. “In the long run, China’s decision may be positive because it shows the government’s confidence in the economy.” The November contract, which expires today, advanced as much as $1.12, or 1.4 percent, to $80.61 a barrel in electronic trading on the New York Mercantile Exchange. It traded for $80.41 at 10:15 a.m. London time. Brent crude oil for December settlement increased as much as $1.26, or 1.6 percent, to $82.36 a barrel on the London-based ICE Futures Europe exchange. Futures yesterday fell $3.59 to $79.49 in New York. Today the more-actively traded December contract rose 90 cents, or 1.1 percent, to $81.06. China’s central bank raised borrowing costs for the first time since 2007, lifting the benchmark one-year lending rate to 5.56 percent from 5.31 percent. The move came to slow gains in property prices and curb lending by banks. China Confidence Steps taken by the government earlier this year to slow China’s economy haven’t had an impact on oil and fuel demand. The country’s crude imports climbed to a record 23.29 million metric tons in September, passing the previous high set in June. “The rate decision reflects continued confidence in China’s macroeconomic performance and demand for oil, which should be positive for prices in the long run,” Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd. in Melbourne, said in a note today. Oil climbed today as the dollar reversed three days of gains against the euro on speculation Federal Reserve policy makers will take more credit-easing measures. The dollar dropped 0.7 percent to $1.3815 to the euro. Crude is also gaining on signs that U.S. fuel demand is rebounding from last year’s slump. U.S. gasoline demand rose 2.7 percent last week, the largest week-to-week jump since May 28, MasterCard Inc. said in its SpendingPulse report. Motorists bought an average 9.26 million barrels of fuel a day in the week ended Oct. 15, the second-biggest payments network company said. Fuel use was the highest since Aug. 20. U.S. Inventories U.S. crude inventories increased by 2.3 million barrels last week, the industry-funded American Petroleum Institute said yesterday. A U.S. Energy Department report today may show oil stockpiles rose 1.5 million barrels last week, according to the median of analyst estimates in a Bloomberg News survey. Gasoline inventories dropped 83,000 barrels last week, the API said. Distillate fuel stockpiles including heating oil and diesel fell 854,000 barrels. The institute collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey. To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net

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