MELBORNE: Oil rose for a second day in New York on speculation that the Federal Reserve may take more steps to stimulate the economy and on OPEC's call on members to cut production in excess of quotas.
Futures advanced as much as 0.7%, heading for a second week of gains. Reports showing U.S. jobless claims unexpectedly climbed and the cost of living fell by the most in more than three years fueled speculation that Fed policy makers will discuss stimulus measures when they meet June 19.
The Organization of Petroleum Exporting Countries would need to reduce output by 1.6 million barrels a day to comply with its targeted ceiling, Secretary-General Abdalla El-Badri said yesterday in Vienna.
Oil for July delivery advanced as much as 58 cents to US$84.49 a barrel in electronic trading on the New York Mercantile Exchange, and was at US$84.48 at 8:52 a.m. Sydney time. The contract increased 1.6% yesterday to US$83.91, the highest close since June 8. Prices are 0.4% higher this week and down 15% this year.
Brent oil for July settlement, which expired, slid 10 cents to US$97.03 a barrel on the London-based ICE Futures Europe exchange at yesterday's close. The more-actively traded August contract gained 45 cents to US$97.17. The European benchmark contract's premium to West Texas Intermediate closed at US$13.12.
Claims for unemployment insurance payments in the U.S. unexpectedly climbed by 6,000 to 386,000 in the week ended June 9, Labor Department figures showed yesterday. Economists surveyed by Bloomberg News projected claims would fall to 375,000. The cost of living declined 0.3% in May.
OPEC kept its output limit at 30 million barrels a day at a meeting in Vienna yesterday as concern that global growth is shrinking outweighed calls by some members for supply cuts to stem sliding prices. (Bloomberg/aph)
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