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Oil rises on Opec output target move

Jun 15 2012 08:00 AFP

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Singapore - Oil rose in Asian trade on Friday after Opec kept to its crude output quotas unchanged and vowed to eliminate overproduction, analysts said.

The market was also supported by hopes that the US Federal Reserve will step in with new stimulus measures to bolster the world's largest economy.

New York's main contract, light sweet crude for delivery in July, was up 68 cents to $84.59 a barrel and Brent North Sea crude for August delivery gained 76c to $97.93 in the afternoon.

"Oil futures rose as the Organisation of the Petroleum Exporting Countries agreed to keep its collective oil output ceiling unchanged... at 30 million barrels per day (mbpd)," said Phillip Futures in a market commentary.

Opec secretary general Abdullah El-Badri said member countries had been asked to cut production by a total of 1.6 mbpd to meet the group's 30 million mbpd production ceiling agreed last December.

"They know they are producing 31.6 mbpd and they have been asked to reduce the 1.6," El-Badri said in Vienna on Thursday where the Opec meeting was held.

"The countries that are participating in 1.6 (mbpd), we will not mention them, they will come back to 30 mbpd. They agree. This is a collective decision," he said.

Investors hope that the latest weak US data could prompt a new round of fresh stimulus measures by the Federal Reserve to boost growth.

US government data released on Thursday showed new claims for unemployment benefits rose 6 000 to 386 000 last week, building on a worrying upward trend in the pace of layoffs.

Data released earlier in the week showed US retail sales fell for a second consecutive month.

"The talk on trading floors is growing that monetary policy easing will be urgently required to try to get the US economy back on track," said Justin Harper, market strategist at IG Markets Singapore.

opec  |  commodities  |  markets  |  oil
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