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Crude oil rose to an eight-week high as investors purchased oil and fuel futures amid returns that have outpaced other securities.

“The financial flow may soon send prices to $85, even if that’s not justified by physical demand,” said Kyle Cooper, a managing director at energy consultant IAF Advisors in Houston. “You’re seeing a lot of money move into the market.”

Oil has advanced 80 percent over the past year, greater than the Dow Jones Industrial Average’s 59 percent increase. Futures traded in a $1.66 range today, drifting between gains and losses, as equities and the dollar fluctuated.

Crude oil for April delivery increased 37 cents, or 0.5 percent, to $81.87 a barrel on the New York Mercantile Exchange, the highest settlement price since Jan. 11.

Brent crude for April delivery rose 58 cents, or 0.7 percent, to $80.47 a barrel on the London-based ICE Futures Europe exchange, the highest settlement since Jan. 11. Brent is trading at a $1.40-a-barrel discount to the New York contract, the narrowest level since Feb. 18. A shrinking differential may discourage shipments to the U.S. from the North Sea.

“There’s well-entrenched bullish sentiment here,” said Tim Evans, an energy analyst at Citigroup Global Markets Inc. in New York. “We will tend to see prices increase if we don’t have a decisively bearish story.”

The Standard & Poor’s 500 Index lost 0.20 point to 1,138.50. The Dow Jones Industrial Average declined 13.68 points to 10,552.52.

The dollar traded at $1.3637 per euro, down 0.1 percent from $1.3637 on March 5. The greenback increased as much as 0.2 percent and dropped 0.6 percent today.

$100 Oil

Iran’s OPEC governor, Mohammad Ali Khatibi, said $100 a barrel is a “good” price for oil, the state-run Mehr news agency reported. “In determining the crude oil price, global inflation and the swings in dollar value should be considered,” Mehr cited Khatibi as saying.

Ministers from the 12-member OPEC will meet on March 17 in Vienna to decide whether to adjust production quotas. OPEC agreed at three meetings in 2008 that the 11 members with quotas would cut daily output by 4.2 million barrels, a record reduction, as demand tumbled during the worst global recession since World War II.

Prices will probably fall to $60 a barrel during the fourth quarter of the year, Adam Sieminski, the chief energy economist at Deutsche Bank AG in Washington, said on Bloomberg Television. “The second half of the year could be weak because inventories are high, demand is still relatively weak, there’s plenty of supply and lots of OPEC spare capacity.”

U.S. Inventories

Analysts were split over whether gasoline inventories declined or increased last week. Stockpiles of distillate fuel, a category that includes heating oil and diesel, fell 1 million barrels in the week ended March 5, according to the median of responses in the survey.

Gasoline for April delivery climbed 1.82 cents, or 0.8 percent, to end the session at $2.2892 a gallon in New York. It was the highest settlement since Oct. 1, 2008. Heating oil for April delivery increased 0.81 cent, or 0.4 percent, to $2.1055 a gallon, the highest settlement since Jan. 12.

Speculator Bets

Hedge-fund managers and other large speculators increased their bets on oil prices rising in New York for a third week, according to the U.S. Commodity Futures Trading Commission.

Speculative net-long positions in oil, the difference between orders to buy and sell the commodity, gained 7.1 percent to 91,417 contracts in the week ended March 2, the commission said on March 5.

Oil volume on the Nymex was 494,666 contracts as of 3:09 p.m. in electronic trading in New York. Volume totaled 549,484 contracts on March 5, 6.7 percent less than the average of the past three months. Open interest was 1.33 million contracts, the most since Feb. 12.

The exchange has a one-business-day delay in reporting open interest and full volume data.

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