Opec to reduce output starting in July, while world economies prepare for panic after Greek polls LONDON — Oil futures gained on Friday, supported by hopes that Greece’s pending elections would result in a government that favours the country’s recently negotiated bail-out and after a report that major central banks stood ready to help stabilise markets. Oil reversed earlier losses after the US markets opened, with traders shrugging off negative consumer sentiment data. "Crude is following equities, which opened higher, and the dollar, because the big news flow will come over the weekend and into next week with Greece and Iran’s talks in Moscow," said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. He was referring to negotiations to be held between major world powers in Russia next week on Iran’s nuclear programme. US consumer sentiment fell in early June to a six-month low on worries about deterioration in the jobs market and Europe’s festering debt crisis, a survey released on Friday showed. Some investors are worried that if Greece moves out of the euro zone, it could trigger a global financial meltdown similar to the one that followed the collapse of Lehman Brothers in 2008, which would slash demand for oil. But officials from the Group of 20 nations, whose leaders are to meet in Mexico next week, said central banks were ready to take steps to stabilise financial markets, if needed, by providing liquidity. Brent crude added 56 cents to $97,73 a barrel by 2.22pm GMT. US crude was up 14 cents to $84,05 a barrel. "We are waiting for the Greek elections. If there is a conclusive result for a government that wants reform then there will be a return of risk appetite and oil will resume the upstream trend," said Harry Tchilinguirian, head of commodity market strategy at BNP Paribas. "There is no real selling ahead of the elections as investors expect a positive outcome, but confirmation is needed." A Greek exit from the euro zone could become more likely should the anti-bailout leftist Syriza party sweep the elections after performing surprisingly well in the first round. OPEC The members of the Organisation of the Petroleum Exporting Countries (Opec) will reduce the group’s output to adhere to its 30-million barrels per day (bpd) output ceiling and the effects should be seen in July, Opec secretary-general Abdullah al-Badri told a news briefing on Friday. But analysts remained sceptical that such a reduction, which would be mostly on Saudi Arabia’s side, would actually be seen. "The next oil movements data will provide first indications whether Opec really starts to cut back production," said Carsten Fritsch, an oil analyst at Commerzbank. Actual Opec production is higher at 31,6-million bpd owing to Saudi Arabia’s extra production. Raising output was a deliberate move by Riyadh to counter the possibility that Iranian oil shipments will fall heavily when a European Union embargo on Tehran starts next month. Iranian production is already down to a 20-year low. Oil prices have dropped from a $128 peak for Brent in March and from $110 for US crude, in part because the economic outlook has darkened but also because of increased Saudi output, which in April set a 30-year high of 10,1-million bpd.

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