Crude oil increased on speculation Federal Reserve Chairman Ben S. Bernanke will announce more stimulus and as Hurricane Irene threatened to shut refineries on the U.S. East Coast. Prices rose on anticipation Bernanke will announce a third round of quantitative easing at Jackson Hole, Wyoming, tomorrow. Irene is the strongest Atlantic storm to threaten the U.S. since 2005. The East Coast has 10 operating refineries that can process 1.21 million barrels of oil a day, accounting for 7.1 percent of the country’s capacity. “There’s a hard-to-defeat feeling that something fresh will be announced at Jackson Hole tomorrow,” said Peter Beutel, president of trading advisory company Cameron Hanover Inc. in New Canaan, Connecticut. “There’s an increasing focus on Irene and all the damage it can do to refineries along the East Coast. Gasoline is up a lot on this and pulling crude higher.” Crude oil for October delivery increased 14 cents to settle at $85.30 a barrel on the New York Mercantile Exchange. Futures have gained 18 percent from a year ago. Brent oil for October settlement rose 47 cents, or 0.4 percent, to end the session at $110.62 a barrel on the London- based ICE Futures Europe exchange. The contract touched $111.45, the highest level since Aug. 17. The European benchmark contract was at a premium of $25.32 to U.S. futures, down from a record $26.21 on Aug. 19. Eyes on Irene Irene is on a course that would skirt the coast this weekend before slamming into New England. The Category 3 hurricane with maximum sustained winds of 115 miles (185 kilometers) per hour was 610 miles south of Cape Hatteras on the North Carolina coast, the U.S. National Hurricane Center said in an advisory at 2 p.m. Miami time. Gasoline for September delivery rose 8.95 cents, or 3.1 percent, to $2.9679 a gallon in New York, the highest settlement price since Aug. 2. Bernanke will speak at the annual Fed symposium in Jackson Hole. European Central Bank President Jean-Claude Trichet will also make a presentation at the conference. Bernanke’s hint of a round of asset purchases, or quantitative easing, during the same event last year helped spur an eight-month rally in the Standard & Poor’s 500. “Traders will be cautious about making new bets before the Jackson Hole speeches,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “We’re awaiting word from the oracles, Bernanke and Trichet, tomorrow and Saturday.” German Selling Futures dropped as much as 2.5 percent during the session after panic selling pushed Germany’s DAX Index lower and U.S. unemployment benefit claims unexpectedly rose. The Labor Department announced in Washington that jobless claims climbed by 5,000 to 417,000 in the week ended Aug. 20. “If we get a good piece of economic news prices move higher and if there’s a negative headline prices drop,” said Adam Sieminski, chief energy economist at Deutsche Bank in Washington. “We will have to get some harder data on whether there will be a third round of quantitative easing.” U.S. gross domestic product grew at a 1.1 percent annual pace in the second quarter, down from the 1.3 percent that the government estimated last month, according to the median of responses in a Bloomberg News survey of economists before a Commerce Department report tomorrow. Libya Production Libya, holder of Africa’s largest crude reserves, will probably restore production to about 300,000 barrels a day over the next two to three months and then to 500,000 a day by the end of the year, Julian Lee, senior energy analyst at the London-based Centre for Global Energy Studies, said yesterday in a telephone interview. Saudi Arabia has boosted supplies this year by about 1 million barrels a day partly in response to the suspension of exports from Libya. The Organization of Petroleum Exporting Countries will increase shipments through the middle of September as a program of emergency supply release by consumer nations ends, according to tanker-tracker Oil Movements. Exports will rise 0.1 percent to 22.69 million barrels a day in the four weeks to Aug. 10, the Halifax, England-based researcher said. That compares with 22.76 million barrels in the month to Aug. 13. The data excludes Ecuador and Angola. Oil volume in electronic trading on the Nymex was 576,348 contracts as of 3:21 p.m. in New York. Volume totaled 528,667 contracts yesterday, 22 percent below the average of the past three months. Open interest was 1.48 million contracts. To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.

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