Oil prices rose to six-month highs Wednesday on optimism that the U.S. is emerging from a severe recession, but expectations that OPEC will not cut production at its meeting in Vienna this week dampened gains.
Benchmark crude for July delivery was up 39 cents to $62.84 a barrel by mid-afternoon in Europe in electronic trading on the New York Mercantile Exchange. Earlier in the session, the contract reached a peak of $63.45, its highest level since mid-November. On Tuesday, the contract rose 78 cents to settle at $62.45.
Oil prices have jumped from below $35 a barrel in March on investor expectations that the worst of the global economic slowdown is over.
Oil and stock investors took heart from Tuesday's report from private research group The Conference Board that showed U.S. consumer confidence in May soared to the highest level since last September. Stock indexes jumped on the news, with the Dow Jones industrial average gaining 2.4 percent.
Some analysts are concerned the quick recovery of oil prices will boost gasoline prices and threaten to undermine consumer demand. Oil prices between $70 and $80 a barrel would hurt growth in developed countries while crude between $90 and $100 would slow emerging market economies, Bank of America Merrill Lynch said in a report Tuesday.
