Oil trading biggest quarterly gain since 1990

Crude oil rose to the highest in eight months, set for its biggest quarterly gain since 1990, as the US dollar declined and militant attacks in Nigeria raised concern that supplies may be disrupted.

Oil jumped as much as 2.6 percent in New York, adding to yesterday’s 3.4 percent gain, as investors sought commodities as a hedge against inflation. The dollar fell as much as 0.3 percent against major currencies. Royal Dutch Shell Plc shut a field after an attack by Nigerian rebels, disrupting supply from Africa’s largest producer.

“Now people are starting to pay attention to supply-side developments on the assumption that demand will rise from here onwards,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “Oil prices are always going to be linked to fundamentals, but in recent times, there is still a high correlation with movements in currency.”

Crude oil for August delivery gained as much as $1.89, or 2.6 percent, to $73.38 a barrel on the New York Mercantile Exchange, the highest since Oct. 21. It was at $72.90 a barrel at 1:57 p.m. in Singapore. Oil has risen 64 percent since the beginning of this year. It rebounded from $32.70 a barrel on Jan. 20 on optimism that the global economic recession is easing.

China, the world’s second-biggest energy consumer, raised domestic fuel prices today by as much as 11 percent to encourage refiners to produce more fuels amid higher crude costs.