Crude oil and gasoline gained for a second day after US consumer confidence beat forecasts, a sign that the economy is recovering from the worst recession since World War II.

Crude rose 0.3 per cent and gasoline climbed as consumer sentiment was little changed in August from the previous month, according to the Reuters/University of Michigan final index. The economy shrank at a slower pace in the second quarter than forecast, a US report showed yesterday.

"The primary driver for everything is sentiment that the economy is recovering and not descending into a 1930s-style depression," Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington, said in an interview.

Crude oil for October delivery rose 25 US cents to settle at $US72.74 a barrel on the New York Mercantile Exchange. Futures fell 1.6 per cent this week and have increased 63 per cent this year. Gasoline for September delivery added 3.04 UScents, or 1.5 per cent, to $US2.0618 a gallon on the Nymex, the highest in more than three weeks.

US consumer confidence dipped to 65.7, better than forecast, from 66 in July, according to the Reuters/University of Michigan report. Confidence in the economic outlook in the 16 European nations that use the euro increased to a 10-month high, the European Commission said today in Brussels.