June 10 (Bloomberg) -- Crude oil rose for a second day after an industry group reported U.S. crude stockpiles dropped and the dollar declined, bolstering the appeal of energy as an alternative investment.
Oil supplies fell 5.96 million barrels to 357.9 million last week, the American Petroleum Institute said late yesterday. Additional support for crude prices came as the dollar fell against the euro.
“The oil market is rallying due to weakness in the dollar and more liquidity in the marketplace,” said Mike Sander, an investment adviser at Sander Capital Advisors Inc. in Seattle. “There is clearly more money moving into the commodities markets with the sharp rises in agriculture, softs, metals, and energy.”
Crude oil for July delivery gained 62 cents, or 0.9 percent, to $70.63 a barrel at 9:32 a.m. Sydney time in after-hours trading on the New York Mercantile Exchange. Yesterday, the contract increased $1.92 to $70.01 a barrel, the highest settlement since Nov. 4.
Oil peaked at $147.27 a barrel on July 11 before slumping to $32.40 on Dec. 19 as the global recession curbed energy use.
The dollar may extend its decline against the euro as speculation the slowdown may be ending reduces demand for the U.S. currency as a refuge. The dollar traded at $1.4068 against the euro at 6:10 a.m. in Tokyo, after falling 1.2 percent yesterday.
Price Forecast
West Texas Intermediate crude oil, the U.S. benchmark, will average $58.70 a barrel in 2009, the Energy Department said yesterday in its Short-Term Energy Outlook. The forecast is up 14 percent from $51.70 estimated in May. Crude oil averaged a record $99.57 in 2008.
Venezuela expects the price of crude oil to rise to between $70 and $80 a barrel by the end of the year, Energy and Oil Minister Rafael Ramirez said yesterday. The Organization of Petroleum Exporting Countries isn’t discussing an output increase, he said. The South American country was OPEC’s sixth- biggest oil producer in May, according to Bloomberg News.
Brent crude for July delivery rose $1.74, or 2.6 percent, to end the session at $69.62 a barrel on London’s ICE Futures Europe exchange. It was the highest settlement since Oct. 21.
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