Oil crosses $50 as Opec keeps cutting
hong kong/london — Oil rose for the first time in six days as an Opec-led committee was said to back prolonging supply cuts and as other markets rallied after the first round of French presidential elections.
Futures climbed 0.9 per cent in New York after slumping 6.7 per cent last week, the first drop in four weeks. A six-month extension to the output cut deal is necessary, the committee concluded, according to delegates.
Equities gained and the dollar weakened against the euro as a snap poll by Ipsos showed centrist Emmanuel Macron would win the second round of voting in France.
Oil had retreated below $50 a barrel amid concern rising US crude production will offset efforts by the Organisation of Petroleum Exporting Countries to trim a global glut. Macron securing a spot in the second round avoids the scenario of a contest between the antiEuropean Union Marine Le Pen and the Communist-backed Jean-Luc Melenchon, curbing threats to the euro zone and encouraging investors to embrace more risk.
“The Arabian Gulf oil producers provided their strongest hint yet that the current output deal with non-Opec producers could be prolonged beyond the original June deadline,” said Tamas Varga, an analyst at PVM Oil Associates in London. “It is hard to foresee a further significant fall in prices prior to the upcoming Opec and non-Opec meeting.”
West Texas Intermediate for June delivery rose 46 cents to $50.08 a barrel on the New York Mercantile Exchange, and was at $50.01 at 9.35am in London. Total volume traded was about 22 per cent above the 100-day average. Prices closed at $49.62 on Friday, the lowest since March 29.
Opec cuts
Brent for June settlement rose 50 cents, or one per cent, to $52.46 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $2.33 to WTI.
Compliance with supply curbs by Opec and its allies from outside of the group was 98 per cent in March, the technical committee concluded, according to a delegate with knowledge of the matter. The committee monitors adherence to the cuts.