Oil Rebounds on OPEC Production Limit &Hopes for Fed Easing
Crude oil gained today on hopes that the Federal Reserve will stimulate the US economy and after the Organization of the Petroleum Exporting Counties maintained its production quotes. The stronger euro and the weakening dollar also helped the commodity even after Moody’s Investors Service reduced Spain’s credit rating.
The Federal Open Market Committee will meet on June 19 to decide the monetary policy. Many traders hope that the Committee will decide to perform monetary easing. Indeed, recent macroeconomic data proved that the US economic recovery is not as robust as was previously thought and additional quantitative easing may be warranted. Inflation slowed 0.3 percent in May, more than was expected. Unemployment claims unexpectedly rose to 386,000 last week from 380,000 the week before.
Some of the OPEC members were demanding to reduce production of oil to stop the drop of prices. The organization decided to keep the ceiling at 30 million barrels a day. Ali
July futures for delivery of crude oil jumped as much as $1.29 to $83.91 per barrel on NYMEX, the biggest advance since April 11. Brent crude ended the trading session flat at $97.03 per barrel on ICE after rising to $97.80.
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