Associated Press Writer
SINGAPORE (AP) — Oil prices edged lower but hovered above $61 a barrel Monday in Asia as investors eyed an OPEC meeting this week and weighed evidence of a global economic recovery.
Trading was light because U.S. markets are closed Monday for Memorial Day.
Benchmark crude for July delivery was down 35 cents to $61.32 a barrel by midday in Singapore in electronic trading on the New York Mercantile Exchange. On Friday, the contract rose 62 cents to settle at $61.67.
Oil has rallied on investor optimism that the worst of the global economic downturn is over. Traders will get fresh data to mull this week when the U.S. releases a consumer confidence index for May and reports on sales of existing and new homes last month.
In Asia, there are signs that the drop in exports has bottomed, although the outlook remains murky.
Investors will also be looking for evidence of increased demand as the U.S. summer driving season begins.
"The $60 level implies that we're going to have a V-shaped recovery in the global economy, and there's really very little evidence of that," said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore.
"In the near-term, the rhetoric about post-Memorial Day driving activity may provide support, but eventually fundamentals will re-exert themselves in the market," he said.
The Organization of Petroleum Exporting Countries meets on Wednesday in Vienna to discuss a possible production cut that would add to 4.2 million barrels a day of output reductions the cartel has announced since September.
OPEC leaders this year have said they want the price of crude at $70 a barrel, and most analysts say the recent jump to above $60 from below $35 in March will keep the group from any further production cuts.
"We don't expect any changes in output targets," Shum said. "The price is too high to cut."
In other Nymex trading, gasoline for June delivery was steady at $1.84 a gallon and heating oil fell 0.72 cent to $1.53 a gallon. Natural gas for June delivery dropped 2.5 cents to $3.49 per 1,000 cubic feet.
In London, Brent prices slid 29 cents to $60.49 a barrel on the ICE Futures exchange.
Copyright 2009 The Associated Press.