A meeting of the 12-nation oil producing cartel in Vienna still has to make a formal decision on Thursday on whether to keep output steady or turn down the spigots -- a move normally taken in times like these where the world is oversupplied and demand is anaemic.
But there was little drama ahead of the meeting, with most oil ministers saying they expected the status quo to remain unchanged.
Even Oil Minister Golam Hossen Nozari of Iran -- one of Opec's price hawks -- said on Wednesday he expected Opec to keep output at present levels.
This sentiment appeared due to optimism that the United States -- the world's largest oil consumer -- is gradually emerging from a severe recession. Oil investors took heart from Tuesday's report from private research group the Conference Board that showed US consumer confidence in May soared to its highest level since last September.
A barrel of crude already fetches more than $60 compared to levels near $30 just four months ago. And that spike has come despite continued anaemic worldwide demand and gloomy future forecasts.
Benchmark crude for July delivery rose $1 to settle at $63,45 a barrel on the New York Mercantile Exchange. Prices haven't been that high since early November. Saudi Oil Minister Ali Naimi on Wednesday suggested greater demand later this year would come only from Asia, with the US and Europe continuing to lag.
Instead of being powered by demand, analysts say oil prices have risen because of international stock markets. But although stocks normally rise six to nine months before the actual economy starts growing again, a series of economic reports have recently suggested that the recession is bottoming out, if not yet ending.
About 74% of the forecasters in a survey by the National Association for Business Economics in the US expect the recession, which started in December 2007, to end in the third quarter. Another 19% predict the turning point will come in the final three months of this year and the remaining 7% believe the recession will end in the first quarter of 2010.
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