Tuesday’s oil futures were looking to add to early-week gains, lifted in anticipation of U.S. output slowed by last week’s winter storms on a slower recovery initially expected as well as a wider collection across materials.
West Texas Intermediate raw for delivery in April
CL.1
CLJ21
rose 31 cents, or 0.5%, to $ 62.01 a barrel on the New York Mercantile Exchange. May Brent raw
BRN00
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the global benchmark, up 30 cents, or 0.5%, at $ 64.66 a barrel on ICE Futures Europe.
“Oil seized in the broadest commodities moving higher, with weaker [U.S. dollar] providing a helpful boost to the building, ”Warren Patterson, head of product strategy at ING, said in a note. “At the same time, there is a growing perception that the oil market is looking tighter over the rest of the year, with several analysts reviewing their expectations beyond the week gone, including ourselves. ”
Goldman Sachs on Monday lifted its predictions, urging Brent to hit $ 75 a barrel before the end of the year. ING last week raised its 2021 forecast for the global benchmark, raising the outlook to $ 65 a barrel compared to the previous forecast of $ 60 a barrel.
US ICE Dollar Index
DXY
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the amount of cash against a basket of six major competitors, up 0.2% on Tuesday, trimmed its weekly loss to 0.2%. The index is down 0.5% so far in February. A weaker dollar can support commodities at the unit price, making them cheaper for consumers of other currencies.
At the same time, “the situation in Texas, which is home to many oil production and processing facilities, is worrying: the temperature is below zero and the power and gas cuts that this would require have paralyzed it. almost all refineries in Texas, have a daily production of up to 5.1 million barrels and make up more than a quarter of the total U.S. seeding capacity, ”said Eugen Weinberg, a product analyst at Commerzbank, in nota.
“So far, less than half of them have returned to work, which is likely to put pressure on provision in and out of Texas. It may take even longer for Texan oil production to return to normal, ”he said.
However, Commerzbank claims that expectations are too high and sees room for prices to turn lower after the rapid run.
“For one thing, we are still a little skeptical about demand, and for another, the production control shown by OPEC + is likely to fall due to high prices,” Weinberg said. “We also see a good chance of Iran’s oil exports returning to the market if an agreement is reached with the US and sanctions are lifted.”