Oil rose to the highest in six months after the Federal Reserve said it will expand record measures to spur the economy in the U.S., the world’s biggest crude consumer. Prices climbed for a fourth day, the longest rising streak since September, on speculation the Fed’s steps will weaken the dollar, boosting investor demand for commodities. The central bank yesterday said it will buy an additional $600 billion of Treasuries through June. U.S. gasoline stockpiles fell last week to the lowest in almost a year, according to a report. “The Fed is pumping money into the economy and the money doesn’t have that many places to go,” said John Vautrain, senior vice-president at U.S. energy consultants Purvin & Gertz Inc. in Singapore. “That’s pumping up the value of commodities.” Crude for December delivery rose as much as 68 cents, or 0.8 percent, to $85.37 a barrel in electronic trading on the New York Mercantile Exchange. That’s the highest intra-day price since May 4. The contract was at $85.31 at 1:56 p.m. Singapore time. Prices are in the longest rally since a four-day run through Sept. 27. The dollar yesterday traded at $1.4179 against the 16- nation euro, the lowest since Jan. 26. A decline in the U.S. currency bolsters the investment appeal of commodities as a hedge against inflation. Record Stimulus Oil has advanced almost 3 percent this week as investors bet that record stimulus, aimed at reducing unemployment and averting deflation, will weaken the dollar. Fed policy makers, after a two-day meeting in Washington yesterday, said progress has been “disappointingly slow” in bringing down joblessness from a 26-year high. The central bank left unchanged its pledge to keep interest rates near zero for an “extended period.” “The quantitative easing was strong,” said Anthony Nunan, an assistant general manager for risk management at Mitsubishi Corp. in Tokyo. “The reason that we haven’t gone higher is that a fair bit of the move has been built into the market.” Brent crude for December settlement rose as much as 67 cents, or 0.8 percent, to $87.05 a barrel on the London-based ICE Futures Europe exchange. Yesterday, the contract gained 1.1 percent to $86.38, the highest settlement since May 4. Gasoline Supplies U.S. gasoline inventories fell 2.69 million barrels in the week ended Oct. 29 to 212.3 million, according to an Energy Department report yesterday. That’s the lowest level since Nov. 20 last year, leaving supplies 6 percent above the five-year average. Distillate-fuel stockpiles, including heating oil and diesel, fell for a sixth week on a drop in imports, declining 3.57 million barrels to 164.9 million, the Energy Department said. That’s the biggest drawdown since the week to April 3, 2009. “It is still accurate to say that inventories appear to have peaked,” Peter Beutel, president of energy adviser Cameron Hanover Inc. in New Canaan, Connecticut, said in a note. The data “showed larger-than-expected drawdowns in distillate and gasoline stocks.” Commercially held crude inventories rose 1.95 million barrels last week to 368.2 million, as refiners cut operating rates to the lowest since March, the report showed. Supplies were forecast to increase 1.5 million, according to the median estimate from 17 analysts surveyed by Bloomberg News. To contact the reporter on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net

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