BEIJING, Mar. 29 -- Crude oil climbed from a two- week low on speculation demand will increase as the global economy recovers from its worst recession since World War II.
A report today in the U.S., the world's largest oil user, will probably show personal spending rose for a fifth month in February, according to a Bloomberg news survey of economists. Major producers and consumers will this week try to agree on ways to reduce oil-price volatility, International Energy Forum Secretary-General Noe van Hulst said yesterday.
"We do seem to be getting some support for prices around that $80 a barrel level," said Toby Hassall, research analyst at CWA Global Markets Pty in Sydney. "We're seeing oil fairly range-bound, which isn't too surprising, and we're just not getting enough underlying strength in the crude oil market fundamentals to really give it a shove higher."
Crude oil for May delivery rose as much as 39 cents, or 0.5 percent, to $80.39 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $80.26 at 7:15 a.m. in Singapore.
The contract dropped 0.7 percent to $80 on March 26, the lowest close in almost two weeks, after a report showed the U.S. economy expanded less in the fourth quarter than analysts had estimated. Prices fell 1.2 percent for the week as U.S. crude oil stockpiles surged to a seven-month high and the rising dollar reduced the appeal of commodity investments.
While the long-term bias is for prices to go higher, the prospect of a stronger dollar may weigh on oil and commodities in the short-term, Hassall said. Stronger growth in the U.S. may be needed before employment and consumer spending recovers, he said.
"It is looking like a protracted and uneven recovery over there and Europe isn't looking any better," he said. "The U.S. consumer sector looks particularly weak still. It's not a particularly bright outlook for the U.S. It looks like they've turned a corner, but it's going to be very slow."
The U.S. currency fell against the euro today after European leaders agreed to a rescue plan for Greece. The dollar fell to $1.3446 to the euro in early Asian trading today, from $1.3410 in New York last week.
Brent crude oil for May settlement rose 21 cents, or 0.3 percent, to $79.50 a barrel on the London-based ICE Futures Europe exchange. It fell 0.4 percent to $79.29 on March 26.
New York oil futures have gained 1 percent this year, as global equities declined early in the period and the rising dollar slowed investor demand for oil and metals as investment havens.
Prices jumped 78 percent last year after plunging to $32.40 a barrel in December 2008, the lowest in more than four years. New York futures reached a record $147.27 in July 2008.
"There is great acknowledgement, more now than there ever was, that this kind of volatility is not good for producers or consumers," Van Hulst, secretary-general of the Riyadh-based International Energy Forum, said in Cancun, Mexico, yesterday. Better supply and demand data from developing nations are among measures that may improve transparency in global oil markets, he said.
Hedge-fund managers and other large speculators last week reduced their bets on rising oil prices for the first time since early February, according to U.S. Commodity Futures Trading Commission data.
Speculative net-long positions, the difference between orders to buy and sell the commodity, fell 9.9 percent to 111,919 contracts in the week ended March 23, the Washington- based commission said in a report.