Associated Press Writer
Oil prices were steady above $63 a barrel Thursday as investors looked to a weekly U.S. inventory report for signs crude demand may be recovering and after OPEC announced, as expected, that it would not cut production levels.
Benchmark crude for July delivery was up 26 cents to $63.71 a barrel by early afternoon in Europe in electronic trading on the New York Mercantile Exchange. On Wednesday, the contract rose $1 to settle at $63.45, a six-month high.
In London, Brent prices gained 38 cents to $62.80 a barrel on the ICE Futures exchange.
As widely expected, the Organization of Petroleum Exporting Countries decided to keep output levels unchanged at a meeting Thursday in Vienna. Saudi Arabian Oil Minister Ali Naimi predicted that oil prices will likely reach around $75 a barrel by the end of the year on the back of growing demand in Asia.
"OPEC is trying to get the world more conformable with the idea of $75-80 oil," said Jonathan Kornafel, Asia director for market maker Hudson Capital Energy in Singapore.
Oil prices have rebounded from below $35 a barrel as investors anticipate demand will improve later this year. Traders, concerned that a massive U.S. fiscal stimulus package will eventually weaken the dollar, have also used crude oil as a hedge against inflation.
"As long as money is being printed left and right you're going to see it flow into the commodity markets and crude keep going higher," Kornafel said.
Investors will be watching for the weekly petroleum inventory data from the Energy Department's Energy Information Administration on Thursday.
Analysts expect an increase of 1.8 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos. Stocks have dropped the last two weeks after rising for the previous ten.
In other Nymex trading, gasoline for June delivery fell 0.87 cent to $1.8830 a gallon and heating oil was up 0.99 cent to $1.5716 a gallon. Natural gas for July delivery was down 4.5 cents at $3.593 per 1,000 cubic feet.
Associated Press writer Alex Kennedy in Singapore and George Jahn in Vienna contributed to this report.
Copyright 2009 The Associated Press.