London: Oil prices pushed above $68 a barrel in thin trade on Monday, with sentiment buoyed by Asian and European equities and by a decision by the G-20 to keep economic stimulus measures in place.
US crude for October delivery rose 51 cents to $68.52 a barrel by 4:09pm, London Brent crude was up 69 cents at $67.50 a barrel.
Group of 20 finance leaders, who met in London on Saturday, said they would not end economic stimulus plans until the recovery was well entrenched, raising the prospect of higher fuel demand in coming months.
Along with US data released late last week showing a slowdown in layoffs, the G-20’s decision helped lift Asian and European shares.
Positive equities in turn helped push the dollar down against both sterling and the euro.
But analysts said oil prices were likely to remain in a narrow range for most of the session because many US investors would be absent for Labour Day, which marks the end of the summer holiday season during which gasoline demand rises.
“Markets are always looking for direction, currently especially from equity markets. We don’t have fundamental driving forces (today) in the oil market, therefore moves are very, very minor in amplitude,” said Andy Sommer, analyst with EGL in Switzerland.
“I wouldn’t expect much to happen during the day because American players are not in today.
Oil prices, which fell 6.5% last week, have been trading in a range between $65 and $75 a barrel since the start of August, with prices swinging on economic data as investors seek clues about the speed of a recovery from the recession.
Oil came under pressure last week on concerns over the jobless rate in the United States, which hit a 26-year high, although the pace of worker layoffs slowed.
Increased crude supplies from the Organization of Petroleum Exporting Countries (Opec) due to slipping compliance, could also put downward pressure on oil prices in the near term, analysts said.
Opec members meet in Vienna for a quarterly output policy meeting this week, with most analysts expecting the group, the source of more than a third of the world’s oil supply, to maintain its official output target to keep prices stable around $70.
“We expect another Opec quota rollover to be the result of the meeting; in addition, there will undoubtedly be calls for better quota compliance (i.e., lower production) from Opec members such as Angola, Iran, and Venezuela,” Societe Generale said in a research note.
For a preview of the Opec meeting, click on
Traders will also be watching a weather disturbance that is moving westward from Africa. There is a medium chance of it becoming a tropical cyclone in the next 48 hours, the US National Hurricane Centre said on Sunday.
Crude oil speculators on the New York Mercantile Exchange reduced their net long positions in the week to 1 September, the Commodity Futures Trading Commission said in a report on Friday.