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Bloomberg
Oil rose, reversing earlier declines, as the European Central Bank said it may pump more stimulus into the region’s economy and the Organization of Petroleum Exporting Countries (Opec) and its allies made progress in setting a date to discuss extending supply cuts.
Futures gained as much as 4.5 percent in New York. The Organization of Petroleum Exporting Countries and its allies have shifted their focus to mid-July for the next meeting to discuss extending production cuts, after talks between Russia and Iran made some progress towards resolving a standoff over the date.
“Europe sold oil this morning on a stronger dollar, and now the US is buying the market on more stimulus expectations,’’ said UBS AG analyst Giovanni Staunovo. West Texas Intermediate for July delivery rose $2.24 to $54.17 a barrel on the New York Mercantile Exchange in New York.
Brent for August settlement gained $1.75 to $62.69 a barrel on London’s ICE Futures Europe Exchange. The global benchmark crude traded at a $8.29 premium to WTI for the same month.
After a meeting, Opec and its allies appeared to be moving towards mid-July as a possible date for next meeting to discuss output cuts. Their failure to agree on a date has given turbulent oil markets little reassurance about the future of production cuts amid an overall slump in crude prices in recent weeks. Iran said it was willing to hold a meeting July 10-12. The group had originally planned to meet next week.
The dispute over the timing of the meeting is playing out amid a broader geopolitical confrontation as Iran is accused of complicity in attacks on the two oil tankers. Iran has denied culpability.
Oil has lost about 20 percent since late April as growing American inventories and an entrenched trade dispute between the US and China continue to cloud the demand outlook. While last week’s attacks on two tankers near the Strait of Hormuz raised concerns about a disruption to crude flows, focus has returned to Opec’s attempts to fix a meeting on supply cuts that are due to expire at the end of the month.