Wednesday May 27, 12:28 PM
Oil price hits six-month peak on eve of OPEC meet
LONDON (AFP) - The price of oil hit a six-month high above 63 dollars on Wednesday, lifted by economic recovery hopes and buoyant equity markets on the eve of an OPEC output meeting, traders said.
In morning trade, New York's main futures contract, light sweet crude for delivery in July, soared as high as 63.45 dollars per barrel -- a level last seen on November 10.
The contract later stood at 63.05, up 60 cents from the closing level on Tuesday.
London's Brent North Sea crude for July advanced 66 cents to 61.90 dollars per barrel, having earlier touched 62.29 dollars -- the highest point since November 5.
Prices had raced higher on Tuesday as traders viewed a jump in US consumer confidence as a signal for an economic rebound and increased energy demand.
"Consumer confidence in America jumped yesterday, and with it, equity markets and oil prices, due to the view an economic recovery is taking shape," said analyst David Hart at the Hanson Westhouse brokerage in London.
Asian and European stock markets bounced higher on Wednesday, mirroring an overnight surge on Wall Street as a surprisingly strong reading on US consumer confidence buoyed recovery hopes.
US consumer confidence leapt in May to an eight-month high, the Conference Board said Tuesday in a report offering fresh hopes of an end to the country's prolonged recession.
The business research group's consumer confidence index, based on a survey of 5,000 US households, spiked to 54.9 in May from 40.8 in April.
In reaction, New York's blue-chip Dow Jones Industrial Average had jumped by 2.37 percent or 196.17 points to end at 8,473.49 points on Tuesday.
The Organization of Petroleum Exporting Countries (OPEC), which pumps 40 percent of world oil, holds a crucial production meeting in Vienna on Thursday.
OPEC ministers look almost certain to keep the oil cartel's production steady, with the "green shoots" of world economic recovery too fresh to justify a cut, ministers and analysts said.
The price of crude has risen sharply in recent weeks, which has relieved the pressure on OPEC members even though oil remains far below the 75 dollars they would like to see.
Forcing prices higher, however, would dampen demand when major economies are critically weak.
The most influential member of the group, Saudi Arabia, was clear about its intentions on Tuesday when Oil Minister Ali al-Nuaimi told journalists here that OPEC would "stay the course."
OPEC cut its production target three times late last year to stabilise prices that tumbled from record highs above 147 dollars per barrel in July 2008 to 32.40 dollars in December.
Meanwhile, the weekly energy report from the US government's Department of Energy will be published on Thursday, one day later than normal due to a public holiday on Monday in the United States.
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