Oil Rises More Than 4% as China Unveils Growth Support Package

By Gavin Evans

Nov. 10 (Bloomberg) -- Crude oil advanced more than 4 percent on speculation stimulus plans by China and other major economies may help sustain growth and demand for fuel.

China, the world's second-largest oil consumer, yesterday said it will spend 4 trillion yuan ($586 billion) through 2010 to prop up the biggest contributor to global economic growth. Copper futures gained as much as 4.9 percent and gold also rose after China said it will increase spending on infrastructure and encourage investment in machinery.

``It's a pretty big spending package they've announced,'' said Toby Hassall, research analyst at Commodity Warrants Australia Pty in Sydney. It will ``definitely give the commodity markets a bit of a boost.''

Crude oil for December delivery rose as much as $2.96, or 4.9 percent, to $64 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $63.69 at 8:24 a.m. in Singapore.

On Nov. 7, the contract rose 27 cents, or 0.4 percent, to $61.04 on, having earlier fallen to $59.97, the lowest intraday price since March 22, 2007. Prices fell 10 percent last week as equities dropped, U.S. fuel stockpiles rose more than expected and the nation's unemployment rate climbed to a 14-year high.

The International Monetary Fund is forecasting that the economies of the U.S., Japan, Europe and the U.K. will all contract next year in their first simultaneous recession since the Second World War.

G-20 Ministers

Governments worldwide must do all they can to lower interest rates and raise spending to support sustainable economic growth, finance ministers and central bankers from the Group of 20 industrial nations said in a statement after a meeting in Sao Paulo yesterday.

Brent crude oil for December settlement gained $2.28, or 4 percent, to $59.63 a barrel on London's ICE Futures Europe exchange. The contract fell 8 cents to $57.35 on Nov. 7.

Shipments from Russia, the biggest producer after Saudi Arabia, have fallen 25 percent below normal levels this month after export duties fell less than oil companies had wanted, Interfax reported Nov. 9.

Producers have contracts to meet and the reduction in deliveries will be temporary, the news service said, citing Nikolai Tokarev, chief executive officer of government-owned pipeline operator OAO Transneft.

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