* Weak U.S. data curbs oil gains
* Central banks prepare for reaction to Greece election
* OPEC to reduce output in July – Sec-Gen Badri
* Coming up: Iran-major powers talks on Monday
(Recasts, updates with settlement prices)
By Robert Gibbons
NEW YORK, June 15 (Reuters) – Oil prices edged up on Friday,
in thin and choppy trade, supported by hopes Greece’s upcoming
election will not result in an exit from the euro zone, while
weak U.S. economic data limited gains.
Both Brent and U.S. crude posted weekly losses, though the
U.S. slip was only 7 cents.
Friday’s gains were hemmed in by separate reports showing
U.S. manufacturing output contracted in May, while factory
activity slowed in New York state in June and U.S. consumer
sentiment fell.
The weak data raised the possibility that the U.S. Federal
Reserve might use more monetary easing to help a sputtering
economic recovery. The Fed’s policy-making committee has a
two-day meeting starting Tuesday.
A weaker dollar, after the euro recovered from early
losses against the U.S. currency, also lent some support to oil,
along with gains on Wall Street.
U.S. stock indexes and oil also received support from news
on Thursday that officials from the G20 nations, whose leaders
meet in Mexico next week, said central banks were ready to take
steps to stabilize financial markets by providing liquidity if
needed in the wake of Greece’s election.
“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.
Brent August crude rose 44 cents to settle at $97.61
a barrel, having swung from $96.97 to 98.10.
Front-month Brent ended six straight lower settlements, but
posted a weekly loss of 1.87 percent. Brent’s July contract
expired on Thursday.
U.S. July crude edged up 12 cents to settle at $84.03
a barrel, ending with a weekly loss of 7 cents.
“At this point, it looks like the markets are frozen and
waiting for the results of the Greek elections, which are
totally unpredictable,” said Dominick Chirichella, senior
partner at Energy Management Institute in New York.
Total crude trading volumes were thin. Brent turnover lagged
its 30-day average by 39 percent and U.S. crude volume trailed
that marker by 25 percent.
U.S. gasoline and heating oil posted more
robust gains than either crude oil contract.
Money managers cut their net long U.S. crude futures and
options positions in the week to June 12, the U.S. Commodity
Futures Trading Commission reported on Friday.
Along with Greece’s political turmoil, Iran’s talks with
major powers about Tehran’s nuclear program set to start Monday
in Moscow kept traders and brokers cautious, with recently
revived talks so far unable to resolve the dispute.
OPEC AFTERMATH
Members of the Organization 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.
Analysts remain skeptical after OPEC’s Thursday meeting that
such a reduction, which would be mostly on Saudi Arabia’s side,
will actually occur.
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.
(Additional reporting by Gene Ramos in New York, Julia Payne
and Simon Falush in London and Manash Goswami in Singapore;
Editing by Bob Burgdorfer, Marguerita Choy and David Gregorio)
