Oil rises on positive forecasts, slow U.S. output restart

Commodities & Futures
Oil rises on positive forecasts, slow U.S. output restart © Reuters. FILE PHOTO: An employee holds a sample of crude oil at the Irkutsk Oil Co-owned Yarakta field in the Irkutsk region

By Bozorgmehr Sharafedin

LONDON (Reuters) – Oil prices rose on Tuesday, underpinned by the likely easing of COVID-19 lockdowns around the world, positive economic forecasts and lower output as U.S. supplies were slow to return after a deep freeze in Texas shut down crude production.

was up 87 cents, or 1.3%, at $ 66.11 a barrel by 0945 GMT, and rose 68 cents, or 1.1%, to $ 62.38 a barrel.

“Vaccine news is helping oil, as the likely removal of mobility restrictions over the coming months on the back of vaccine rollouts should further boost the oil demand and price recovery,” said UBS oil analyst Giovanni Staunovo.

Commerzbank (DE:) analyst Eugen Weinberg said the very optimistic oil price forecasts issued by leading U.S. brokers have also contributed to the latest upswing in prices.

Goldman Sachs (NYSE:) expects Brent prices to reach $ 70 per barrel in the second quarter from the $ 60 it predicted previously, and to $ 75 in the third quarter from $ 65 earlier.

Morgan Stanley (NYSE:) expects Brent crude prices to climb to $ 70 per barrel in the third quarter.

“New COVID-19 cases are falling fast globally, mobility statistics are bottoming out and are starting to improve, and in non-OECD countries, refineries are already running as hard as before COVID-19,” Morgan Stanley said in a note.

Disruptions in Texas caused by last week’s winter storm also supported oil prices. Some U.S. shale producers forecast lower oil output in the first quarter.

Stockpiles of U.S. crude oil and refined products likely declined last week, a preliminary Reuters poll showed on Monday.

A weaker dollar also provided some support to oil as crude prices tend to move inversely to the U.S. currency.

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