Global Crude Prices Rise to Highest in 13 Months Amid Stagnant US Output
Crude oil futures recorded additional gains on Tuesday, as both the US West Texas Intermediate (WTI) and benchmark Brent rose to the highest levels since January of last year.
WTI for April delivery jumped by 1.18% on Tuesday, rising above $62 per barrel, meanwhile Brent for April settlement increased by 1.2%, exceeding $66 per barrel on the ICE Futures Europe exchange. The positive momentum in financial markets that has been witnessed as of late appears to be translating into the oil sector, as investors continue to maintain a bullish view.
According to the latest Morgan Stanley outlook, Brent crude prices are expected to reach $70 per barrel by the third quarter 2021, following signs of a significant improvement in the oil market. Likewise, Goldman Sachs Commodities Research also revised its oil outlook, raising its price expectations for Brent crude by an additional $10 per barrel for both the second and third quarters of this year. The bank also anticipates that Brent crude will increase to $70 per barrel, as inventories are expected to diminish, and marginal costs for restarting upstream activity are expected to rise.
In the meantime, US shale oil producers are expected to resume their output of more than 2 million barrels per day within the next two weeks. Numerous rigs across the southern US were forced to shut down operations amid an abnormal winter storm that wreaked havoc in Texas and the Plains states.
Information for this briefing was found via Reuters, Morgan Stanley, and Goldman Sachs. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.