Oil rises as OPEC committee backs extending cuts

Hong Kong - Oil rose the first time in six days as an OPEC-led committee was said to back prolonging supply cuts and as investors favoured riskier assets after the first round of French presidential elections.

Futures climbed as much as 0.7% in New York after slumping 6.7% last week. A six-month extension to the output cut deal is necessary, the committee concluded, according to delegates with knowledge of the matter.

The US dollar weakened against the euro after centrist Emmanuel Macron and far-right nationalist Marine Le Pen headed to the second round of voting, which a snap poll by Ipsos showed Macron would win.

Oil’s rally has faltered amid concern rising US crude production will offset efforts by the Organisation of Petroleum Exporting Countries (OPEC) to trim a global glut. Macron securing a spot in the second round avoids the scenario of a contest between the anti-European Union Le Pen and the Communist-backed Jean-Luc Melenchon, curbing threats to the euro zone and encouraging investors to embrace more risk.

"While the increased popularity of the centrist candidate is not a strong market driver, a collective sense of relief that the global economy is over another hurdle should see a risk-on rally," Michael McCarthy, chief markets strategist at CMC Markets in Sydney, said in a note.

"Gold is under selling pressure and oil and copper are receiving support."

West Texas Intermediate for June delivery rose as much as 33 cents to $49.95 a barrel on the New York Mercantile Exchange, and was at $49.86 at 1:30 in Hong Kong. Total volume traded was about 6% above the 100-day average. Prices closed at $49.62 on Friday, the lowest since March 29.

OPEC cuts

Brent for June settlement rose as much as 40 cents, to $52.36 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $2.39 to WTI.

Compliance to supply curbs by OPEC and its allies from outside of the group was 98% in March, an improvement from February, the technical committee concluded, according to a delegate with knowledge of the matter.

The committee monitors adherence to the cuts and doesn’t make policy.

The Bloomberg Dollar Spot Index lost 0.4%. A weaker greenback bolsters the appeal of commodities.

Oil-market news:

US drillers targeting crude added 5 rigs to oil fields, boosting the count to 688, according to data on Friday from Baker Hughes. Exxon Mobil won’t be allowed to bypass US sanctions against Russia to resume drilling for oil in a joint venture that seeks to tap billions of barrels of that country’s crude.