Crude oil rose a third day after an increase in consumption of distillate fuel, a category that includes heating oil and diesel, bolstered speculation that supplies will drop.

Demand for distillate fuels rose 11 percent to 3.95 million barrels a day last week, the biggest gain since Dec. 11, the Energy Department reported yesterday. Inventories of the fuel advanced 321,000 barrels last week. Heating oil stockpiles fell for the first time in five weeks, the report showed.

“Heating oil seems to be leading the way,” said chief market strategist at Confluence Investment Management in St. Louis. “This is the time of year when you build distillate supplies, and we got just a small gain last week. The heating oil component was actually down, which is strange for this point on the calendar.”

Crude oil for August delivery rose 64 cents, or 0.9 percent, to $76.08 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Oil is set for a 5.5 percent increase this week, the most since the week ended May 28.

Heating oil for August delivery increased 2.08 cents, or 1 percent, to $2.0261 a gallon in New York. The contract is up 5.8 percent this week.

Total U.S. fuel demand rose 3.2 percent to 19.6 million barrels a day in the week ended July 2, according to the department. It was the biggest weekly gain since April 30.

Oil in New York has traded within about an $8 price range for the past month, between $71.09 and $79.38 a barrel.

Recent Range

“We’re in the middle of the recent range,” said  president of consultant Schork Group Inc. in Villanova, Pennsylvania. “We’re going to probably continue yo-yoing around $75 through the remainder of the summer.”

Crude oil volume on the Nymex has averaged 692,000 contracts a day this year. This level has been exceeded once since June 17.

“We’re in the midst of the summer doldrums, which can be dangerous,” Schork said. “It wouldn’t take much to make the market move wildly because the volume is light.”

The global economy will grow 4.6 percent in 2010, the biggest expansion since 2007, the International Monetary Fund said on July 7 in revisions to its World Economic Outlook.

Oil may rise next week after the IMF upgraded its global economic outlook and as U.S. supplies dropped to a two-month low, a Bloomberg News survey showed. Twenty of 38 analysts and traders, or 53 percent, forecast crude will increase through July 16. Ten respondents, or 26 percent, predicted futures will be little changed and eight saw a decrease.

Brent crude for August settlement climbed 66 cents, or 0.9 percent, to $75.37 a barrel on the London-based ICE Futures Europe exchange.