Oil Rises for a Second Day as Interest Rate Cuts to Spur Growth

By Gavin Evans

Nov. 3 (Bloomberg) -- Crude oil rose for a second day in New York on speculation fuel demand will increase after the U.S., India and China cut interest rates to prop up economic growth.

The Reserve Bank of India on Nov. 1 lowered its benchmark repurchase rate for the second time in two weeks, and for the first time in 11 years reduced the amount of money lenders are required to keep in government bonds. The People's Bank of China on Oct. 29 cut its key rate, three days before a weekend report showed manufacturing shrank in October.

Crude oil for December delivery gained as much as 47 cents, or 0.7 percent, to $68.28 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $68.24 a barrel at 9:42 a.m. in Singapore.

Oil fell 33 percent last month on signs that the economic slowdown in the U.S. and Europe will spread to emerging markets, curbing fuel consumption. The previous record price decline occurred in February 1986, when crude oil slipped 30 percent to $13.26 a barrel. Oil trading in New York began March 30, 1983.

To contact the reporter on this story: Gavin Evans in Wellington at gavinevans@bloomberg.net