News: Oil prices jump more than $1 on slow U.S. output restart.
SINGAPORE (Reuters) – Oil prices rose more than $ 1 on Tuesday as U.S. production slowly returned after a freezer in Texas that halted crude oil production last week.
Shale oil producers in the southern United States could take at least two weeks to restart the more than 2 million barrels of daily crude oil production (bpd) that was shut down due to the cold weather as frozen pipes and power cuts said their recovery is slowing.
Brent crude rose $ 1.06, or 1.6%, to $ 65.30 a barrel by 0204 GMT, after previously hitting a high of $ 66.38. US crude rose 81 cents, or 1.4%, to $ 62.51 a barrel after hitting a session high of $ 62.73. Both benchmarks are up more than 1% after up nearly 4% in the previous session.
“The positive momentum in the oil complex continues and investors are blatantly predisposed to be bullish,” said Stephen Innes, chief strategist for global markets at Axi, in a note.
Goldman Sachs Commodities Research raised its Brent crude oil price forecast for the second and third quarters of 2021 by $ 10. This has resulted in lower expected inventory levels, higher marginal costs to resume upstream activities and speculative inflows.
Wall Street Bank expects Brent prices to hit $ 70 a barrel in the second quarter, compared to previously forecasted $ 60 and $ 75 in the third quarter from $ 65 earlier.
Morgan Stanley expects Brent crude oil prices to climb to $ 70 a barrel in the third quarter on “signs of a much improved market” including the prospect of demand picking up.
“It’s hard not to be optimistic about oil prices as the freezing disruption virtually guarantees that the summer revival in crude demand will wipe out the remaining glut of supply,” said Edward Moya, senior market analyst at OANDA in New York.
“Global oil demand is looking much better now as the Pfizer vaccine shows positive results after one dose. Britain sees the end of the pandemic in sight and as hospital stays and deaths continue to decline after the peak in early January.”
Inventories of US crude oil and refined products likely fell last week, according to a preliminary Reuters poll on Monday due to the disruption in Texas.
Reporting by Jessica Jaganathan; Arrangement by Richard Pullin & Shri Navaratnam
Original Source © Reuters