Oil prices will continue to rise as US production slowly picks up again

© Reuters. FILE PHOTO: An employee holds a crude oil sample in Irkutsk Oil’s Yarakta field in the Irkutsk region

By Jessica Jaganathan

SINGAPORE (Reuters) – Oil prices rose again on Tuesday after jumping in the previous session, hitting a high of more than 13 months as US production was slow after a Texas freeze that halted crude oil production last week returned.

Shale oil producers in the southern United States could take at least two weeks to restart the more than 2 million barrels of daily crude oil production (bpd) that was shut down due to the cold weather as frozen pipes and power cuts said their recovery is slowing.

Brent crude oil futures rose 28 cents, or 0.4%, to $ 65.52 a barrel by 0102 GMT, while oil rose 14 cents, or 0.2%, to $ 61.84 a barrel. Both benchmarks rose almost 4% in the last session.

“The positive momentum in the oil complex continues and investors are blatantly predisposed to be bullish,” said Stephen Innes, chief strategist for global markets at Axi, in a note.

“Several major oil price revisions were announced overnight and may have contributed to a rally of over 3%,” he said.

Goldman Sachs (NYSE 🙂 Commodities Research raised its price forecast for the second and third quarters of 2021 by $ 10 as it cited lower expected inventory levels, higher marginal costs to resume upstream activity, and speculative inflows.

Wall Street Bank expects Brent prices to hit $ 70 a barrel in the second quarter, compared to previously forecasted $ 60 and $ 75 in the third quarter from $ 65 earlier.

Morgan Stanley (NYSE 🙂 expects Brent crude oil prices to soar to $ 70 a barrel in the third quarter on “signs of a much improved market” including prospects for demand improvement.

OPEC and US oil companies, which are also propping up prices, see limited rebound in shale oil supplies this year as leading US producers freeze production despite rising prices, a decision that would help OPEC and its allies.

Inventories of US crude oil and refined products likely fell last week, according to a preliminary Reuters poll on Monday due to the disruption in Texas.

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