Bloomberg Crude Oil Rises Above $70, Gasoline Surges, on Dollar Decline

June 9 (Bloomberg) -- Crude oil rose above $70 a barrel and gasoline climbed to an eight-month high as the dollar fell, bolstering the appeal of energy as an alternative investment.

Oil advanced 2.8 percent as rising stock prices reduced the need for holding the U.S. currency as an inflation hedge. The U.S. Energy Department will probably report tomorrow that refiners boosted operating rates to meet summer gasoline demand, according to a Bloomberg News survey.

“This is a financial-driven market not a fundamental- driven market,” said Michael Lynch, president of Strategic Energy & Economic Research, in Winchester, Massachusetts. “It’s hard to see a lot of rational reasons for this rally. The flow of investors, not consumers, that’s what’s supporting the oil and commodity markets.”

Crude oil for July delivery gained $1.92 to $70.01 a barrel at 2:51 p.m. on the New York Mercantile Exchange, the highest settlement since Nov. 4. Prices have risen 57 percent this year.

Prices climbed in electronic trading after the American Petroleum Institute reported that U.S. crude-oil supplies dropped the most since September. Futures were up $2.35, or 3.5 percent, at $70.44 a barrel at 4:35 p.m. more...