2012.06.12 15:55:07 Oil Follows Stocks Higher as OPEC Looms

-- U.S. oil futures rise with equities markets, euro

-- Nymex crude-oil recently gains 55c to $83.25/Bbl

-- OPEC says oil market well supplied

NEW YORK--U.S. crude-oil futures aimed higher Tuesday after
three-straight losing sessions, pulled by broader markets despite
signs of high supplies in the oil market.

Light, sweet crude-oil for July delivery recently traded 55 cents
higher at $83.25 a barrel on the New York Mercantile Exchange. Brent
crude on the ICE futures exchange for July delivery traded 16 cents
lower at $97.84 a barrel.

Rising stock markets along with gains in the euro against the dollar
buoyed crude-oil futures, which have suffered along with other riskier
assets amid Europe's debt crisis.

European markets were mostly higher, with the Stoxx Europe 600 up 0.3%
and Spain's IBEX-35 adding 0.5%. Dow Jones Industrial Average futures
pointed to a higher opening.

Still, oil investors remained cautious about high global supplies
after the Organization of Petroleum Exporting Countries said its
members are pumping oil at the highest level since 2008, keeping the
market well supplied amid a tenuous economic picture.

OPEC said its crude production rose to 32.964 million barrels a day in
April, up 631,000 barrels a day from a month ago. The group estimates
global demand at just over 30 million barrels a day, indicating that
OPEC believes it is pumping more than the market needs.

The report, ahead of OPEC's meeting in Vienna Thursday, comes after
Saudi Arabia's oil minister said the group may need a higher output
ceiling, which analysts said could suggest the Saudis aren't ready to
cut production back from near 10 million barrels a day.

"It looks like production is going to stay high, and at these levels,
in this economy, there is plenty of oil," said Carl Larry, head of
trading advisor Oil Outlooks and Opinions. "The Saudis are adamant
about not cutting."

Crude-oil prices have suffered from the fallout of Europe's debt
crisis in recent weeks, tumbling from above $105 a barrel in early May
to an 8-month low of $82.70 on Monday.

Investors are concerned that a bailout of Spain's banks passed over
the weekend won't do enough to halt the debt crisis that has spread
from Greece to larger European states. And elections on Sunday could
decide whether Greece leaves the euro-zone, potentially sparking a
broader crisis in financial markets.

Further deterioration in the euro-zone's economic growth could weigh
on global oil demand, and some analysts say the supply and demand
picture in the physical market is already weak. Olivier Jakob,
managing director of Swiss consultancy Petromatrix, said light, sweet
crude-oil grades in the Atlantic Basic are being pressured along with
oil from the Mediterranean.

Lower prices in these physical markets, due to comfortable supply
conditions, are spilling over into Brent crude prices, Jakob said.

Front-month July reformulated gasoline blendstock, or RBOB, recently
traded 0.69 cents higher at $2.6635 a gallon. July heating oil
recently traded 1.34 cents higher at $2.6491 a gallon.

--Jenny Gross contributed to this report

Write to Jerry A. DiColo at jerry.dicolo@dowjones.com


(END) Dow Jones Newswires

June 12, 2012 03:35 ET (07:35 GMT)