MercoPress. South Atlantic News Agency

Oil prices climb to six-month high as US consumer confidence jumps

Oil prices climbed on Tuesday to a new six-month high as traders viewed a jump in US consumer confidence as a signal for an economic rebound and increased energy demand. The rise comes ahead of OPEC’s meeting later this week in Vienna.

New York's main futures contract, light sweet crude for delivery in July, rose 78 cents from the closing price on Friday to end at 62.45 dollars, the highest close since November 5. The intraday price shot up to 62.50 dollars. London's Brent North Sea crude for July jumped 1.03 dollars to 61.24 dollars.

Monday was a market holiday in Britain and United States.

The market was boosted by soaring US consumer confidence, which leapt in May to an eight-month high, with consumers seeing signs of better times ahead for the recession-mired economy.

The Conference Board, a US business research group, said its consumer confidence index spiked to 54.9 points in May from 40.8 in April, bolstering hopes the worst of the global slump may be over.

Elsewhere, ministers from the Organization of the Petroleum Exporting Countries (OPEC), which pumps some 40% of the world's oil supply, meet on Thursday for a scheduled output gathering in Vienna. Most analysts as well as some OPEC nations do not expect the cartel to introduce further production constraints.

“We will stay the course” said Saudi Oil Minister Ali al-Nuaimi, representing OPEC's biggest oil producer.

Asked if there was a consensus on this position among members of the group, Nuaimi replied: “We will know that on Thursday when we meet.”

On Sunday, Algerian Energy Minister Chakib Khelil also predicted that the OPEC ministers would maintain current production quotas.

“We need the world economy to pick up again and I think maintaining the status quo goes in that direction,” he said on the margins of a meeting of G8 energy ministers in Rome earlier this week.

The Saudi minister said that oil prices should rise to 75 dollars per barrel “we hope between the third and fourth quarter” of this year.

A stronger US currency dents demand for dollar-priced crude which becomes more expensive for buyers holding weaker currencies. This in turn, pushes oil prices lower.

OPEC has steadily cut production since late last year in a bid to steady prices which have tumbled from record highs above 147 dollars in July to 39 dollars last December. Since then however the price of oil has again almost doubled.