Bloomberg Oil Rises Fourth Day as Stocks, Dollar Outweigh Demand Concern

April 24 (Bloomberg) -- Crude oil rose for a fourth day, the longest stretch in two months, as advancing equities and a weaker dollar outweighed concern about lower fuel demand.

Oil gained 3.9 percent after better-than-expected earnings from American Express Co., Ford Motor Co. and Microsoft Corp. sent stocks higher. Prices fell earlier on signs the Organization of Petroleum Exporting Countries isn’t cutting output fast enough to reduce a supply glut. U.S. crude stockpiles are at their highest in nearly 19 years.

“The strength in equity markets is the main reason oil prices are higher,” said Bill O’Grady, chief markets strategist at Confluence Investment Management in St. Louis. “We are ignoring incredibly high inventories.”

Crude oil for June delivery rose $1.93 to settle at $51.55 a barrel on the New York Mercantile Exchange. Futures are up 16 percent this year. The June contract declined 1.8 percent this week.

The Standard & Poor’s 500 Index increased 1.7 percent to 866.23. The Dow Jones Industrial Average climbed 119.23 points to 8,076.29.

“The rising stock market is telling us that we are close to the bottom,” said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York. “The economy might not take off dramatically, but the worst is probably over.”

Weaker Dollar

The dollar dropped against the euro after a report showed that German business confidence advanced from a 26-year low in April on expectations that the recession in Europe’s biggest economy will ease. The dollar dropped 0.8 percent to $1.3253 per euro from $1.3144.

“The weaker dollar is definitely giving commodity markets strength,” said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “We had pretty ugly inventory data this week and the market didn’t go down. This tells you a lot about market sentiment right now.”

U.S. crude oil stockpiles rose 3.86 million barrels the 370.6 million last week, the highest since September 1990, an Energy Department reported April 22.

“The fundamentals of supply and demand are only of interest to academics right now,” Barakat said. “These numbers are backward-looking indicators. Fund managers are focused on the stock market because that’s a forward-looking indicator.”