Oil rose & The Irish bailout story is driving today’s gains said "Thorbjoern Bak Jensen"

Oil rose, rebounding from its biggest weekly loss in three months, the optimism of a deal to rescue the banks of Ireland, avoid debt problems undermining Europe's economic growth and fuel demand.

Futures fall back on some of last week's 4 percent after Ireland yesterday called for a rescue of the European Union and the International Monetary Fund to save its banks. The decision pushed the euro to a one-week high against the dollar even more attractive commodity to investors.

"The rescue story of Ireland is boosting profits today," said Thorbjoern Bak Jensen, an analyst with Global Risk Management in Middelfart, Denmark. "The speculation that Ireland would not get the support has been putting pressure on the previous prices."

Crude for January delivery gained as much as 89 cents, or 1.1 percent, to $ 82.87 a barrel in electronic trading on the New York Mercantile Exchange. It was at $ 82.78 at 10:15 am, London time. Brent crude oil for January settlement advanced to $ 1.11, or 1.3 percent, to $ 85.45 a barrel on London's ICE Futures exchange in Europe.

On 19 November, the New York contract fell 44 cents, or 0.5 percent, to $ 81.98. Futures are up 4.1 percent this year. Prices fell late last week after China ordered banks to increase reserves in a move that could slow growth and crimp demand for fuel in the country's largest energy consumer in the world.

The dollar index, used by IntercontinentalExchange Inc. to track the dollar against six major currencies worldwide, fell 0.5 percent to 78,101. It's down for a fourth day.

"The concerns of the debt of the euro are declining as Ireland has decided to accept the ransom and that will lead to a weaker dollar," said Serena Lim, a commodity strategist at Australia and New Zealand Banking Group Ltd. in Singapore. "It is rather the weakening dollar is helping drive oil prices."

The demand for diesel

U.S. consumption diesel increased in October last year, a sign that the U.S. economy is recovering, according to the American Petroleum Institute.

The demand for ultra low sulfur diesel, the type used on the roads, climbed 8.4 percent on average 3.19 million barrels a day last month, the industry-funded group said 19 of November. Consumption during the first 10 months rose 2.9 percent to 2.97 million barrels a day.

Hedge funds bullish bets on oil cut by most in almost three months. large speculators reduced long call positions, or bets on rising prices, 15 percent in the seven days ended Nov. 16, the report says U.S. Weekly Commodity Futures Trading Commission on 19 November. It was the first decline in four weeks and the biggest decline from seven days to 24 August.