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The
dollar fell against the euro and a basket of currencies, making
oil cheaper for consumers in Europe and also for holders of
other currencies.
Brent crude oil for July was up 40 cents at $65.28 a barrel by
1030 GMT. U.S. crude was up 60 cents at $60.80 a barrel.
Ministers from the Organization of the Petroleum Exporting
Countries (OPEC), responsible for more than a third of the
world's oil output, meet in Vienna on Friday to decide on
production policy for the next six months.
The group has been producing up to 2 million barrels per day
(bpd) more than needed this year, but analysts expect demand to
pick up, helping to drain stocks and balance the market.
Saudi Arabia's oil minister, Ali al-Naimi, has said he expects
oil demand to increase in the second half of this year while
supply decreases, in a sign that the kingdom's strategy of
defending market share was working.
"Demand is picking up. Good! Supply is slowing, right? That is a
fact," Naimi told reporters. "You can see that I'm not stressed,
I'm happy."
Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt,
noted that the Saudi oil minister had said it would take time
for the oversupply to be reduced and for balance to be restored
on the oil market.
"A weaker U.S. dollar is lending prices buoyancy, as are
comments made by the Saudi Arabian Oil Minister," Fritsch said.
Several banks and analysts, including Morgan Stanley, have
suggested that OPEC could raise its production target,
acknowledging that it has been producing more than planned over
the last few months.
But most investors expect no change in OPEC's official target.
"OPEC meets on Friday and is in no mood to cut output," said
Amrita Sen, chief oil analyst at consultancy Energy Aspects.
"The gulf between the member countries remains extremely wide,
and without a contribution from everyone ... Saudi Arabia will
not reduce production."
The contrasting views between OPEC members are partly the result
of differing extraction costs, with Saudi Arabia the driving
force behind keeping output high in defence of market share,
while Venezuela and Iran have favoured cuts to help to promote
higher prices.
(Additional reporting by Henning Gloystein in Singapore; editing
by Jason Neely and Jane Merriman)
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