2010-08-27 09:10

LONDON - Oil rose for a second day in New York, buoyed by advancing equity markets and speculation that crude's 7 percent drop this month has been excessive relative to the economic outlook.

Oil climbed as much 1 percent as European stocks rebounded from a five-week low and the MSCI Asia Pacific Index snapped two days of losses.

The investment appeal of commodities was boosted as the dollar weakened against all but three of its 16 most-traded peers.

US crude inventories last week surged more than 10 times the amount forecast by analysts, Energy Department data showed on Wednesday.

Crude oil for October delivery rose as much as 70 cents, or 1 percent, to $73.22 a barrel in electronic trading on the New York Mercantile Exchange, and was at $73.17 at 9:09 am London time. Brent crude oil for October settlement increased 69 cents to $74.17 a barrel on the London-based ICE Futures Europe Exchange.

The dollar traded at $1.2719 per euro at 9:06 am London time, from $1.2659 on Wednesday. Oil advanced 1.2 percent on Wednesday as US equities snapped a four-day losing streak.

The gains came even as crude stockpiles rose 4.11 million barrels to 358.3 million barrels last week, according to a report from the Energy Department.

Bloomberg News