Oil prices jumped by at least $1 on Tuesday, underpinned by optimism over coronavirus vaccine rollouts and lower output as US supplies were slow to return after a deep freeze in Texas shut in crude production last week.
Shale oil producers in the southern United States could take more than 2 weeks to restart the more than 2 million barrels per day (bpd) of crude output that shut down due to cold weather, as frozen pipes and power supply interruptions slow their recovery, according to sources .
Brent crude was up $1.10, or 1.7%, at $66.34 a barrel by 0437 GMT, after earlier reaching a high of $66.79. US crude rose 92 cents, or 1.5%, to $62.62 a barrel, having reached a session high of $63. Both benchmarks have risen more than 2% on Tuesday after climbing almost 4% in the previous session.
“The positive momentum continues in the oil complex, with investors unabashedly predisposed to a bullish view,” Stephen Innes, chief global markets strategist at Axi said in a note.
Goldman Sachs Commodities Research raised its Brent crude oil price forecasts by $10 for the 2nd and 3rd quarters of 2021, citing lower expected inventories, higher marginal costs to restart upstream activity and speculative inflows.
The Wall Street bank expects Brent prices to hit $70 per barrel in the 2nd quarter from the $60 it predicted previously and $75 in the 3rd quarter from $65 earlier.
Morgan Stanley expects Brent crude prices to jump to $70 per barrel in the 3rd quarter on “signs of a much improved market” including prospects of a pick-up in demand.