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The
Organization of the Petroleum Exporting Countries (OPEC) is
widely expected on Friday to keep a group output target of 30
million barrels per day (bpd), despite calls from some producers
to cut supply to support prices.
The cartel is now pumping about 2 million bpd more than needed,
analysts say, feeding a glut that has left millions of barrels
in storage and kept prices at close to half their peak levels
last year.
Brent for July was up 25 cents at $64.05 a barrel by 1035
GMT. U.S. crude futures were 20 cents higher at $59.85.
The dollar was down 0.7 percent against a basket of currencies,
making oil cheaper for non-dollar investors, as the euro surged
on German Bund yields.
"The stronger euro is now supporting oil prices," said Tamas
Varga, oil analyst at London brokerage PVM Oil Associates.
Energy analysts at Morgan Stanley echoed the views of many
analysts, saying OPEC members were unlikely to make any
market-moving decisions.
"The recent rise in volatility should fade after the meeting and
some relief rally is not out of the question," they said in a
report.
IHS Energy also said it expected no reversal of OPEC's policy of
keeping production high in defence of market share, instead of
cutting output to support prices.
"Although surprises from OPEC can never be ruled out, prospects
for a policy reversal at this time range from slim to
non-existent. Saudi Arabia and its Gulf allies, which last
November instigated the policy of defending market share instead
of prices, appear resolved to persist with it," said Bhushan
Bahree, senior director at IHS Energy.
Strong global fuel demand has helped support oil prices despite
the glut. In China, almost 2 million new cars are sold every
month despite its economic slowdown.
Demand is also strong in Europe. Goldman Sachs said Europe's
high diesel consumption was a risk to the bank's bearish Brent
outlook of $58 per barrel for 2015 and $62 for next year.
European diesel demand growth reached 7.2 percent in the first
quarter, or 420,000 bpd, compared with a year before, close to
the highest rate seen in the past 30 years, Goldman said.
(Additional reporting by Henning Gloystein; Writing by
Christopher Johnson; Editing by David Holmes and Mark Potter)
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