Oil pushes towards $69; G20 lifts sentiment
Oil prices pushed toward $69 a barrel in thin trade on Monday, with sentiment buoyed by Asian and European equities and by a decision by the G20 to keep economic stimulus measures in place.
U.S. crude for October delivery rose 73 cents to $68.75 a barrel by 1358 GMT (9:58 a.m. EDT). London Brent crude was up 92 cents at $67.74 a barrel, having hit an intra-day high of $68.05.
Group of 20 finance leaders, who met in London on Saturday, said they would not end economic stimulus plans until the recovery was well entrenched.
Traders predicted the G20's extended financial support would translate into higher fuel demand.
Along with U.S. data released late last week showing a slowdown in worker layoffs, the G20's decision helped lift European shares <.FTEU3> 1.5 percent. <.EU> Positive equities in turn helped push the dollar down against both sterling and the euro.
But analysts said price gains were likely to be limited because many U.S. investors would be absent for Labor Day, which marks the end of the summer holiday season when gasoline demand rises.
Markets are always looking for direction, currently especially from equity markets. We don't have fundamental driving forces (today) in the oil market, therefore moves are very, very minor in amplitude, said Andy Sommer, analyst with EGL in Switzerland.
I wouldn't expect much to happen during the day because American players are not in today.
Oil prices, which fell 6.5 percent last week, have been trading in a range between $65 and $75 a barrel since the start of August, with prices swinging on economic data as investors seek clues about the speed of a recovery from the downturn.
Oil came under pressure last week on concerns over the jobless rate in the United States, which hit a 26-year high, although the pace of layoffs slowed.
OPEC MEETING
Kuwait's oil minister said members of the Organization of the Petroleum Exporting Countries were in a general consensus to keep output levels steady when the cartel's ministers meet in Vienna this week.
He said Kuwait and other Gulf Arab oil producing countries would be pushing for better compliance with output targets.
Increased crude supplies due to slipping compliance could put further pressure on oil prices in the near term, analysts said.
Compliance discipline has slipped from a peak of 80 percent to less than 70 percent as oil prices rebounded from a low of $32.40 in December to this year's peak of $75 hit in August.
Delegates already in Vienna ahead of the meeting, which begins late on Wednesday, told Reuters they were satisfied with the oil price, even though inventory levels were much higher than OPEC considers appropriate.
The market is also watching a weather disturbance that is moving westward from Africa. There is a medium chance of it becoming a tropical cyclone in the next 48 hours, the U.S. National Hurricane Center said on Sunday.
(Additional reporting by Fayen Wong in Perth; editing by Sue Thomas)
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