News

Futures Movers: Oil prices look to finish at a nearly 3-year high; Goldman Sachs lifts Brent year-end target to $90 a barrel

0

Prices for U.S. and global benchmark crude were on track to mark their highest settlements in almost three years on Monday, as oil prices continued to rally on the back of tight supplies and strengthening demand.

Goldman Sachs has boosted its Brent oil price year-end target to $90 a barrel, citing the lingering impact of Hurricane Ida on supply while demand ramps up, particularly in COVID-averse Asia.

November Brent crude
BRNX21,
+1.86%
,
the global benchmark, was up $1.47, or 1.9%, at $79.56 a barrel on ICE Futures Europe. December Brent
BRN00,
+1.93%

BRNZ21,
+1.93%
,
the most actively traded contract, was up $1.48, or 1.9%, at $78.71 a barrel.

November West Texas Intermediate crude
CL00,
+1.95%

CLX21,
+1.95%

rose $1.45, or 1.9%, to $75.43 a barrel on the New York Mercantile Exchange.

Both front-month WTI and Brent crude contracts were poised to settle at their highest levels since October 2018, FactSet data show.

Analysts at Goldman Sachs, led by Damien Courvalin, lifted their year-end forecast on Brent crude-oil to $90 a barrel from a previous forecast of $80, citing the aftereffects of the storm and rising demand, particularly in Asia. The analysts said Ida should prove to be the most bullish hurricane in U.S. history, canceling the ramp-up in OPEC+ output since July.

At the same time, global oil demand is back to converging to pre-COVID levels. Traffic congestion in China quickly recovered after a summer dip. The delta-driven decline in global flights was smaller than the analysts initially feared.

For almost all of this year so far, the crude market has been “biased towards undersupply,” said Robbie Fraser, global research and analytics manager at Schneider Electric, in a note. “There are concerns that supply could become even tighter as temperatures cool across the northern hemisphere.”

Fraser added that there’s a unique challenge this year in the form of record natural gas and liquid natural gas prices in Europe and East Asia. “That’s expected to make alternative options like diesel, fuel oils and propane much more attractive if buyers have some flexibility in heating options.”

Among the oil products traded on Nymex, October gasoline
RBV21,
+1.32%

climbed by 1.2% to $2.215 a gallon and October heating oil
HOV21,
+1.48%

rose 1.4% to $2.299 a gallon.

Natural-gas futures, meanwhile, rose more than 7%. “An upgraded probability of a second La Niña event this winter will keep gas buyers scouring markets for supplies,” said analysts at BCA Research.

October natural gas
NGV21,
+7.88%
,
which expires at the end of Tuesday’s session, climbed 7.8% to $5.542 per million British thermal units.

: Boeing boosts U.S. durable-goods orders, but shortages still a drag on the economy

Previous article

Metals Stocks: Gold prices trade mostly lower on rise in Treasury yields

Next article

You may also like

Comments

Leave a reply

Your email address will not be published. Required fields are marked *

More in News