Oil prices edge higher after weekly loss as Goldman sees supply deficit on summer fuel demand

Environment

Platform Eureka, an offshore oil and gas platform operated by Beta Operating Company LLC, off the coast of Long Beach, California, US, on Thursday, Nov. 2, 2023. 
Tim Rue | Bloomberg | Getty Images

Crude oil futures rose slightly on Monday as analysts see summer fuel demand pushing the market into a supply deficit in the coming weeks.

Goldman Sachs analysts said Brent should rise to $86 in the third quarter as summer transportation and cooling demand pushes the market into a “sizeable” deficit of 1.3 million barrels per day, or bpd.

Here are today’s energy prices:

  • West Texas Intermediate July contract: $76.38 a barrel, up 85 cents, or 1.1%. Year to date, U.S. has gained 6.6%
  • Brent August contract: $80.44 a barrel, up 81 cents, or 1%. Year to date, the global benchmark is ahead 4.4%.
  • RBOB Gasoline July contract: $2.39 per gallon, up 0.67%. Year to date, gasoline futures are up 14%.
  • Natural Gas July contract: $3.09 per thousand cubic feet, up 5.96%. Year to date, gas is up 22.6%.

Oil prices posted a loss last week after OPEC+ agreed to increase production from October through September 2025.

OPEC+ can delay, pause or reverse its decision to raise production if needed to stabilize the oil market, Goldman analyst Daan Struyven told clients in a Sunday note.

Stock Chart IconStock chart icon

WTI vs. Brent

Goldman sees a $75 floor for Brent as lower prices promote demand and a $90 ceiling due to higher-than-expected global inventories and the OPEC+ production decision.

Long positions, or bets that futures prices will rise, are at the lowest level since 2011, while short positions are close to record highs, according to an analysis by UBS.

“We think this is overly pessimistic,” said UBS analyst Giovanni Staunovo. Inventories should start falling in the coming weeks and demand should increase by 2 million bpd to 2.5 million bpd through August.

Traders are looking ahead to the Federal Reserve meeting and inflation data on Wednesday, as well as to oil market reports from OPEC and the International Energy Agency on Tuesday and Wednesday.

Articles You May Like

Police force ends use of strip searches for ‘welfare’ purposes – but questions remain after Sky News investigation
England vs. Japan: Elliot Daly, Immanuel Feyi-Waboso out; Tom Curry back
Russia’s climate of fear as it prosecutes hundreds for speaking out against the war
FTX co-founder Gary Wang avoids prison time for role in crypto fraud
The letter that shows how close much-loved double act came to splitting up