RTRS: Oil slips on OPEC hike possibility, demand fear
By Robert Gibbons
NEW YORK, June 6 (Reuters) - Oil fell on Monday in choppy
trading on raised expectations that OPEC will raise production
targets this week and on continuing concerns about high prices
curbing oil demand.
Indications that high prices are restricting demand in the
consuming West, confirmed by the worst U.S. jobs report since
September, have alarmed a group of OPEC's core members led by
Saudi Arabia enough that they will push for a rise in output at
the producer group's Wednesday meeting in Vienna.
Opposition to higher OPEC output targets is expected from
Iran and Venezuela. [ID:nLDE7540D1]
TransCanada Corp's (TRP.TO) restart of its 591,000
barrel-per-day (bpd) Keystone crude oil pipeline on Sunday, a
week after being shut by a leak at a Kansas pumping station,
added pressure on oil prices. [ID:nN05225928]
The dollar recovered against the euro and the dollar index
also turned slightly higher, after early weakness had supported
dollar-denominated oil prices.
The possibility of a tropical cylcone developing over the
next 48 hours, reported by the U.S. National Hurricane Center,
limited the downside for oil prices because of the potential of
storm-related disruptions to U.S. Gulf of Mexico and Gulf Coast
oil production. [ID:nL3E7H61KB]
Middle East turmoil, most notably in Yemen and Syria, also
helped limit crude price losses.
Brent crude for July delivery LCOc1 fell 72 cents to
$115.12 a barrel by 12:06 p.m. EDT (1606 GMT), off the session
low of $114.14.
U.S. July crude CLc1 fell 70 cents to $99.52 a barrel,
having dropped as low as $98.64 and hovering near front-month
crude's 100-day moving average of $99.67 and the 20-day MA of
$99.90.
"Crude oil futures have been choppy, moving in the recent
range, cautious ahead of this week's OPEC meeting," said Andrew
Lebow, broker at MF Global in New York.
"Volume is modest at this point as people are awaiting
results of the meeting on Wednesday. Also being watched are
developments in the Middle East and North Africa."
Total crude trading volumes lagged in morning trading in
New York, well below 30- and 250-day averages.
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Is the global economy slowing? r.reuters.com/pad89r
U.S. crude stock levels: link.reuters.com/syh89r
OPEC production and targets: r.reuters.com/zyg89r
A 24-hour technical outlook on U.S. oil [ID:nL3E7H3039]
For a 24-hour outlook on Brent crude [ID:nL3E7H3043]
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(Additional reporting by Gene Ramos in New York, Jessica Donati
in London and Rebekah Kebede in Perth; Editing by David
Gregorio)