UPDATE 8-Oil climbs 5% on U.S. jobless drop, OPEC+ meeting hopes

UPDATE 8-Oil climbs 5% on U.S. jobless drop, OPEC+ meeting hopes

Reuters  | Jun 06, 2020 03:40

UPDATE 8-Oil climbs 5% on U.S. jobless drop, OPEC+ meeting hopes

* Brent, WTI gain for sixth week
* Brent has risen 19% this week, WTI up 11%
* OPEC+ to meet Saturday to discuss output cuts - Russia
* U.S. Gulf offshore fields in path of Storm Cristobal

(Adds weekly change, settlement prices, storm Cristobal update)
By Jessica Resnick-Ault
NEW YORK, June 5 (Reuters) - Oil prices rose on Friday after
an unexpected fall in the May U.S. jobless rate and OPEC's
decision to bring forward to Saturday discussions on whether to
extend record production cuts.
Brent crude LCOc1 futures settled up $2.31, or 5.8%, at
$42.30 a barrel, surging 19.2% on the week. U.S. West Texas
Intermediate (WTI) crude CLc1 futures rose $2.14, or 5.7%, to
$39.55 a barrel, rising 10.7% on the week.
The U.S. Labor Department reported a surprise fall in the
jobless rate to 13.3% last month from 14.7% in April.
Brent has risen 17% since May 29 to reach a three-month
high, in a range more comfortable for producers like Russia. The
contract has more than doubled since crashing as low as $15.98 a
barrel on April 22. WTI is up 11%.
Both benchmarks were headed for a sixth week of gains,
lifted by the output cuts and signs of improving fuel demand as
countries ease lockdowns imposed to fight the new coronavirus
outbreak.
"OPEC and the U.S. jobless drop boosted the market," said
Phil Flynn, senior analyst at Price Futures Group in Chicago.
"If we see jet fuel demand recover, that may give us hope that
we can look ahead to a day where these supplies can dwindle
down," said Flynn, pointing to American Airlines Group Inc's
announcement Thursday about increased U.S. flights in
July. Russia's energy ministry said a video conference of a group
of leading oil producers, known as OPEC+, would be held on
Saturday. The market was hopeful that some laggard countries may have
agreed to align with the production cut deal.
OPEC+ had said it would bring forward the meeting, which had
been scheduled for next week, should Iraq and others agree to
boost adherence to supply cuts. Two OPEC+ sources said Saudi Arabia and Russia had agreed to
extend deeper cuts until the end of July but said Riyadh was
also pushing to extend them until the end of August.
If OPEC+ fails to agree to roll over the output curbs, the
cut could drop back to 7.7 million bpd from July through
December as previously agreed.
Adding support was Tropical Storm Cristobal. It is expected
to enter the central Gulf of Mexico, an area rich with offshore
platforms, and could make landfall along Louisiana's refinery
row on Sunday.

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