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Brent near $98 after Opec keeps target steady

Singapore, June 15, 2012

Brent futures rose towards $98 on Friday, extending gains after producer group Opec agreed to keep its output target unchanged for the second half of the year, although uncertainty surrounding Europe's debt crisis capped further advances.

The Opec deal to retain the output limit at 30 million barrels a day implies a cut in supply of 1.6 million bpd. Oil is also drawing support from news that major central banks stand ready to take steps to stabilize financial markets if cliffhanger Greek elections on Sunday result in turmoil.

Brent crude had gained 76 cents to $97.93 a barrel by 0451 GMT. US crude rose 69 cents to $84.60 a barrel, after settling $1.29 higher.

"That news is giving some comfort to the market that there will be coordinated action if it is required," said Ken Hasegawa, a commodity sales manager at Newedge Japan. "That is why we are seeing gains in prices today."

Brent is poised to fall 1.4 percent this week, declining for six out of the last seven. The US contract is set to rise 0.6 percent in its second straight week of gains, coming back from losses made in the previous five.

The European benchmark may trade in a wide range between $95 and $105 over the next few days and U.S. crude around $80 to $90, as investors try to assess the future of the euro zone and the broader impact it may have on the global economy, Hasegawa said.

Analysts at ANZ said in a report they expect the US benchmark to trade in a range from $80 to $87 in the near term, with a downside bias for the contract to break below $80. - Reuters




Tags: Opec | Brent | Debt crisis |

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