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SINGAPORE – Oil prices jumped more than $ 1 on Tuesday, as U.S. production was slow to return after a deep freeze in Texas ended oil production last week.
Shale oil producers in the southern United States can take at least two weeks to restart the more than 2 million barrels a day (bpd) of oil production that closed due to cold weather, as frozen pipes and power outages power supplies slow their recovery, sources said.
Brent crude was up $ 1.06, or 1.6%, to $ 65.30 a barrel at 0204 GMT, after previously hitting $ 66.38. US crude rose 81 cents, or 1.4%, to $ 62.51 a barrel after hitting the session high of $ 62.73. Both benchmarks increased by more than 1% after rising almost 4% in the previous session.
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“The positive moment remains in the oil complex, with investors blatantly predisposed to an optimistic outlook,” said Stephen Innes, Axi’s chief global markets strategist in a note.
Goldman Sachs Commodities Research increased its Brent crude oil price forecasts by $ 10 for the second and third quarters of 2021, citing lower expected stocks, higher marginal costs to restart upstream activity and speculative inflows.
Oil prices jumped more than $ 1 on Tuesday as U.S. production was slow to return after a deep freeze in Texas that ended oil production last week. Photo credit: iStock
The Wall Street bank expects Brent prices to hit $ 70 a barrel in the second quarter, down from $ 60 previously forecast, and $ 75 in the third quarter, down from $ 65 before.
Morgan Stanley expects Brent oil prices to rise to $ 70 a barrel in the third quarter with “signs of a much better market”, including prospects for a pick-up in demand.
It is hard not to be optimistic about oil prices now that the break from the deep freeze virtually guarantees that the resumption of oil demand in the summer will erase any excess supply that remains, ”said Edward Moya, senior market analyst at OANDA in New York .
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“Global oil demand is looking much better now that the Pfizer vaccine shows positive results after a dose, the UK sees the end of the pandemic ‘in sight’ and as hospitalizations and deaths continue to decline after reaching its peak in the beginning of January.”
US crude oil and refined inventories likely fell last week, a preliminary Reuters poll showed on Monday due to the disturbance in Texas.