During the last week, oil prices in the US surged by more than $1 as the output remained low to return following a deep freeze in Texas shut-in crude production.
It is reported that Shale oil producers in the southern US might take at least two weeks to resume the more than 2 million barrels per day of crude output that shut down because of cold weather, which resulted in frozen pipes and power supply interruptions.
According to the report, Brent crude surged by $1.06, or 1.6%, at $65.30 a barrel, after earlier hitting a high value of $66.38. The US crude went up by 81 cents, or 1.4%, to $62.51 a barrel, after hitting a session high of $62.73. Both benchmarks have risen more than 1% after climbing nearly 4% in the previous session.
Chief global markets strategist of Axi, Stephen Innes, recently said:
The positive momentum continues in the oil complex, with investors unabashedly predisposed to a bullish view,
Furthermore, Goldman Sachs Commodities Research raised its Brent crude oil price projections by $10 for Q2 and Q3 of 2021, indicating lower expected inventories, higher marginal costs to restart upstream activity and speculative inflows.
According to the Wall Street bank, Brent prices may reach $70 per barrel in Q2 from the $60 it predicted earlier and $75 in Q3 from $65.
Furthermore, it is also expected that Brent crude prices to jump to $70 per barrel in Q3 on “signs of a much-improved market,” with hopes of a pick-up in demand.
Edward Moya, senior market analyst at OANDA, said:
It is hard not to be bullish with oil prices now that the deep freeze disruption practically guarantees the summer pickup in crude demand will erase whatever supply glut is left,
The global oil demand is looking a lot better now that the Pfizer vaccine shows positive results after one dose, the U.K. sees the end of the pandemic ‘in sight’, and as hospitalizations and deaths continue to decline after peaking in early January.
On the other hand, it is said that Stockpiles of U.S. crude oil and refined products are likely to dropdown.
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