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By Bloomberg

West Texas Intermediate crude rose for a second day on speculation that fuel demand is increasing amid signs of an improving economy in the U.S., the world's biggest oil consumer. Brent gained in London.

Futures climbed as much as 0.7 percent in New York. U.S. gasoline inventories probably fell by 900,000 barrels to 203.5 million last week, according to a Bloomberg News survey before Energy Information Administration figures today. Stockpiles dropped by 3.7 million, the American Petroleum Institute was said to have reported yesterday. Consumer confidence in the country advanced to a seven-year high in October, data from the Conference Board showed.

"Oil prices have been supported by better-than-expected economic indicators we've been getting from countries including the U.S. and Japan," Hong Sung Ki, a senior commodities analyst at Samsung Futures Inc. in Seoul, said by phone today. "We can't expect a strong rebound in oil but I'd say the sharp decline is now over."

WTI for December delivery rose as much as 56 cents to $81.98 a barrel in electronic trading on the New York Mercantile Exchange and was at $81.91 at 4:08 p.m. Seoul time. The contract climbed 42 cents to $81.42 yesterday, the highest close since Oct. 23. The volume of all futures traded was 16 percent below the 100-day average. Prices have decreased 17 percent this year.

Brent for December settlement gained as much as 67 cents, or 0.8 percent, to $86.70 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $4.57 to WTI, compared with $4.61 yesterday.

Oil Stockpiles

WTI is retracing losses within a bear market, having slid more than 20 percent from a recent peak amid expanding global supplies. Futures are down about 10 percent in October, set for the largest monthly drop since May 2012.

U.S. crude inventories are forecast to have increased by 3.65 million barrels in the week ended Oct. 24, according to the median estimate in the Bloomberg survey of 10 analysts. Stockpiles rose by 3.2 million, the API reported yesterday, Live Squawk said on Twitter.

Distillate supplies, including heating oil and diesel, probably fell by 1.4 million barrels last week, the survey showed. The industry group in Washington was said to have reported a drop of 3 million.

The API collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that data be filed with the EIA, the Energy Department's statistical arm.

U.S. Economy

The Conference Board's index of consumer confidence advanced to 94.5 this month, the highest level since Oct. 2007, the New York-based private research group said yesterday. The gauge is up from a September reading of 89 that was stronger than initially projected, and exceeded the most optimistic forecast in a separate Bloomberg survey of economists.

In Japan, industry production climbed to 2.7 percent in September from the previous month, the Trade Ministry said. That's the biggest gain since January, beating the 2.2 percent gain predicted by economists.

The nation is Asia's largest oil consumer after China, according to the International Energy Agency in Paris.