LONDON (Bloomberg) -- Crude oil rose for a fourth day on speculation a proposed $700 billion U.S. government rescue plan for the finance industry may shore up demand.

Oil has climbed 16 percent since Sept. 16, the biggest four-day gain since October 2000, as lawmakers pledged fast consideration of the Treasury’s plan to buy devalued mortgage- related securities from investment firms. The dollar fell to its lowest in three weeks against the euro, boosting the appeal of commodities as a hedge.
“The measures announced go towards shoring up sentiment around the financial sector,” said Harry Tchilinguirian, senior oil market analyst at BNP Paribas SA. “The collapse of certain investment banks should not hide the fact that commodity demand will remain strong because of emerging market growth.”
Crude oil for October delivery rose as much as $3.25 a barrel, or 3.1 percent, to $107.80 a barrel on the New York Mercantile Exchange, the highest since Sept. 8. It was at $106.98 at 12 p.m. in London.
The contract, which expires at the close of trading on Monday, jumped as much as 7.4 percent on Sept. 19, capping the biggest three-day rally in almost a decade, as investors bought oil to cancel out earlier bets on falling prices.
“To take these events and say oil prices have much further to fall assumes a much worse economic outlook and I think we’re far from that,” said Mike Wittner, head of oil research at Societe Generale SA in London.
The International Energy Agency said Sept. 10 that it expects global consumption of crude to increase by 900,000 barrels a day, or 1 percent, next year.
-------------------November oil
The U.S. currency declined to $1.4618 per euro, the lowest since Sept. 2, on concern the bailout plan will widen the country’s budget deficit.
Oil fell more than $10 a barrel early last week as the bankruptcy of Lehman Brothers Holdings Inc. shocked world equity markets.
Hedge fund and other large speculators sold more Nymex crude futures than they had bought during late July and early August when oil prices were falling. That flow reversed during the past five weeks, data from the Commodity Futures Trading Commission shows.
Those speculators now have a net long position, having bought 202,219 contracts and sold 182,840, as of Sept. 16. the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 13,043 contracts, or 206 percent, from a week earlier.
The number of outstanding oil futures positions held by all traders, known as open interest, has declined 18 percent from June to 1.17 million.
---------Brent crude
Brent crude oil for November settlement rose as much as $4.49, or 4.5 percent, to $104.10 a barrel on London’s ICE Futures Europe exchange. It was at $103.20 a barrel at 12:02 p.m. London time. The contract rose $4.42, or 4.6 percent, to $99.61 a barrel on Sept. 19.
Brent traded $3.68 a barrel below crude traded on the Nymex because of persisting hurricane-related output losses in the Gulf of Mexico and of a cease-fire declaration in Nigeria. The discount widened to $4.94 on Sept. 19, the widest in nearly three weeks.
The Movement for the Emancipation of the Niger Delta said on Sunday that it had decided to halt a week of attacks on Africa’s biggest oil industry. Brent is sensitive to disruptions in the delta because it’s used to price Nigerian crude.
Crude oil prices are “too high” because the global economic slowdown may spread and cut consumption, the International Energy Agency’s deputy executive director said.
“The economic slowdown in the U.S., Europe hasn’t gotten into China, India much, but at some point you have to presume it will,” William Ramsay said in an interview in Bangkok on Monday.