Brent Crude Oil Rises Back to Level Before OPEC Meeting
Brent crude rose, returning prices to the level prior to OPEC’s May 31 meeting. Hedge funds and other money managers increased bullish bets on Brent last week to the most in more than three months, a report showed.
Brent advanced as much as 1.9 percent to $102.30 a barrel. Speculative bets that prices will rise, in futures and options combined, outnumbered short positions by 161,550 lots in the week ended May 28, according to data from ICE Futures Europe. Chinese manufacturing indexes showed small businesses struggling, sapping momentum in the economy of the world’s second-biggest consumer of oil.
“We are back at where we were left at the start of Friday” before OPEC met, Torbjoern Kjus, a senior oil analyst at DNB ASA (DNB) in Oslo, said by phone. “Chinese numbers were taken negatively, but there are other arguments, such as refineries coming back from maintenance, and there’s heavy oil field maintenance going on.”
Brent for July settlement was at $101.72 a barrel, up $1.33 on the ICE Futures Europe exchange at 1:40 p.m. London time. Earlier in the same session prices had traded less than $100 for the first time in a month. Brent slid 2.2 percent last week and 1.9 percent in May.
West Texas Intermediate for July delivery was at $92.67 a barrel, up 70 cents, in electronic trading on the New York Mercantile Exchange, after falling 1.6 percent last month. Brent was at a premium of $9 to WTI futures, compared with $8.42 on May 31.
The Organization of Petroleum Exporting Countries kept its output ceiling of 30 million barrels a day at a meeting in Vienna on May 31. OPEC members collectively exceeded that target by about 1 million barrels a day last month, according to data compiled by Bloomberg.
JPMorgan Chase & Co. cut its forecast for Brent to an average of $113 a barrel in the third quarter, from $120 previously, according to a May 31 report received by e-mail today. The bank reduced its outlook for the three months ended December to $117, from $120, and for 2014 to $117.50, from $122.50. JPMorgan cited demand weakness in Europe and emerging markets and growing non-OPEC supply.
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