Oil gains as OPEC keeps goal unchanged

SINGAPORE - Agence France-Presse

Iran’s Minister of Petroleum Rostam Ghasemi gestures at the OPEC meeting. AP photo

Oil rose in Asian trade on June 15 after the Organization of the Petroleum Exporting Countries (OPEC) kept to its crude output quotas unchanged and vowed to eliminate overproduction, analysts said.
The market was also supported by hopes that the U.S. 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 76 cents to $97.93 in the afternoon on June 15.

30 million barrels
“Oil futures rose as OPEC 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 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 U.S. data could prompt a new round of fresh stimulus measures by the Federal Reserve to boost growth.

U.S. government data released on June 14 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 U.S. 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 U.S. economy back on track,” said Justin Harper, market strategist at IG Markets Singapore.