Oil rose, trimming its first weekly loss in three before European leaders meet Oct. 23 to decide on a rescue fund to ease the debt crisis threatening the region’s economy. Brent’s premium narrowed amid speculation that Muammar Qaddafi’s death will increase Libyan crude output. Futures climbed as much as 0.9 percent after closing yesterday at a one-week low. European governments may deploy as much as 940 billion euros ($1.3 trillion) to fight the debt crisis, two people familiar with discussions said. The death of the former Libyan leader will expedite the return to normal output levels, according to the state-run National Oil Corp. “Oil prices are a mixed call today, as the direction will depend on a resolution to problems in Europe,” Tom Pawlicki, a Chicago-based analyst at MF Global Holdings Ltd., said in a note today. “The ups and downs of the crisis continue, and will no doubt be a factor again in today’s trade.” Crude for December delivery gained as much as 77 cents to $86.84 a barrel in electronic trading on the New York Mercantile Exchange and was at $86.50 at 2:20 p.m. in Singapore. The contract yesterday fell 0.3 percent to the lowest close since Oct. 13. Front-month futures are down 0.4 percent this week and 5.3 percent lower this year. Brent oil for December settlement traded at $109.80 a barrel, up 4 cents on the London-based ICE Futures Europe exchange. The European benchmark contract was $23.31 more than New York crude, compared with yesterday’s close of $23.69 and a record of $27.88 on Oct. 14. Libya Output Qaddafi’s death in his home town of Sirte yesterday “will help in getting a lot of fields back into production as soon as possible,” Nuri Berruien, the chairman of National Oil, said yesterday in a telephone interview from Libya. “Now that Sirte is liberated, people can move quickly. People can go to the fields that are in the west.” Not all analysts are convinced. Daniel Yergin at IHS-CERA and Edward Morse at Citigroup Global Markets Inc. said Qaddafi’s death isn’t likely to expedite the return of oil output or bring back foreign companies as fast as the interim government says. Fighting has reduced the availability of light, sweet crude, or oil with low density and sulfur content, from Libya, a member of the Organization of Petroleum Exporting Countries. The country’s output fell to 45,000 barrels a day in August, according to Bloomberg estimates. The North African nation pumped 100,000 barrels a day last month. ‘Firm Tone’ Oil in New York also was pushed higher by a U.S. manufacturing gauge that expanded in October at the fastest pace in six months. The Federal Reserve Bank of Philadelphia’s general economic index increased to 8.7 from minus 17.5 last month. Readings greater than zero indicate expansion in the area covering eastern Pennsylvania, southern New Jersey and Delaware. “Data from the U.S. is pointing to a better position for manufacturing than we’ve seen previously, and that’s helping oil markets keep a firm tone,” said Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty Ltd. in Sydney. “We’re looking at a fairly quiet day across all markets ahead of the European summit. Expectations have now been hosed down significantly, and the oil market made some adjustments.” Finance ministers meet in Brussels today starting at 2 p.m. to lay the groundwork for an Oct. 23 meeting of government leaders. They agreed to an Oct. 26 summit yesterday after Germany and France said the European Union needs more time to seal a “global and ambitious” accord. Oil’s advance in New York may stall as it approaches technical resistance on the weekly chart at $89.84 a barrel, according to data compiled by Bloomberg. That’s the 50 percent Fibonacci retracement of the drop to $32.40 in December 2008 from a record high of $147.27 in July that year. Sell orders tend to be clustered near chart-resistance levels. To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at akwiatkowsk2@bloomberg.net

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