Oil rose from an eight-month low on speculation that policy makers will do more to stimulate the economy and on expectations that U.S. inventories dropped.

Prices gained as much as 1.2 percent after Federal Reserve Bank of Chicago President Charles Evans said he would support a variety of measures to generate faster job growth. Government data will show oil inventories fell the most in almost five months last week, a Bloomberg survey of analysts showed.

The policy-setting Federal Open Market Committee will meet next week as slowing job growth at home and a deepening crisis in Europe weigh on the economic outlook. Evans, who isn’t a voting member of the FOMC this year, has been one of the most vocal proponents of additional easing.

Oil for July delivery gained to $83.72 a barrel on the New York Mercantile Exchange after dropping to $81.07, the lowest intraday level since Oct. 6. Prices are down 15 percent this year.

Brent oil for July settlement fell 55 cents, or 0.6 percent, to $97.45 a barrel on the London-based ICE Futures Europe exchange.

The price of gold rising against the backdrop of withdrawal of investors from risky assets due to concerns about whether the financial assistance of the banking system in Spain would not be able to contain the spread of the debt crisis in the eurozone.

Last Saturday Eurogroup (eurozone finance ministers' council) found it possible to provide Spanish to recapitalize troubled banks and 100 billion euros from European funds, but market participants refer to this decision with caution.

In addition, with pessimism in the markets were taken by the Finance Minister of Cyprus Vasosa Siarlisa that the country may soon turn to the EU for financial assistance, which put additional pressure on investor sentiment.

The June gold futures on the COMEX today rose to 1608.6 dollars per ounce.

Change % Change Last

Gold 1,597 +6 +0.36%

Oil 81.12 -2.98 -3.54%