NEW YORK (CNN/Money) - Oil prices climbed above $30 a barrel for the first time in six weeks Monday as traders reacted to a stubborn deficit in U.S. stockpiles and a potential output cut from OPEC.
U.S. crude futures last traded up 42 cents at $29.98 a barrel, having marked their highest level since April 22 at $30.10 a barrel. Benchmark Brent crude gained 31 cents to $26.63 a barrel, just 50 cents away from a two-month peak.
"We were strong overnight and crude seems to be leading the way, and we may see some buy stops if we get to $30.05 and $30.10," said a NYMEX floor trader.
Coming a week before the summer driving season starts, when U.S. demand for motor fuel peaks, dealers feared a potential price spike.
"With global inventory still at extremely low levels and particular concern over low product and crude oil inventory in the U.S., there is little obvious sign of any significant weakness," Barclays Capital analyst Kevin Norrish said in a daily report.
The U.S. Energy Information Administration said implied gasoline demand in the week to May 23 climbed to 9.3 million barrels per day (bpd), 600,000 bpd more than a year ago.
The big stock deficit has been accompanied by signs that the Organization of the Petroleum Exporting Countries could be preparing to announce an output cut at a meeting next week, despite the fact that prices remain above its $25 target.
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"Paradoxically, the price strength of the past couple of days makes a production cut ... less likely," Norrish said. "If OPEC does cut production it will be reacting to perceived weakness in market fundamentals later on this year."
Venezuelan Oil Minister Rafael Ramirez said last week that the cartel might cut its ceiling by up to one million bpd at the June 11 meeting, but any decision hinges on the extent and speed of recovery of Iraq's battered oil industry.
Iraqi officials are targeting output of some 1.5 million bpd by mid-June, about half its pre-war level.
Baghdad is expected later this week to sell some eight million barrels of crude oil stored in tanks on the Turkish Mediterranean coast, but the timing of sustained supplies remains unclear.
The head of the International Energy Agency, Claude Mandil, said last week that a production cut is unwarranted due to Iraq's slow recovery and thin stockpiles.
-- from staff and wire reports
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