Energy
Monday, June 10th, 2024 2:25 pm EDT
Key Points
- Oil futures prices rose slightly due to predictions of a summer supply shortage. Analysts expect strong summer demand to outweigh increased production by OPEC+, leading to a deficit.
- Goldman Sachs forecasts a price increase for Brent oil to $86 per barrel by Q3 due to rising demand. However, they also see a potential cap at $90 due to high global stockpiles.
- Market sentiment is bearish with low investor confidence in price increases. Analysts like UBS’s Staunovo believe this pessimism is unfounded, expecting rising demand and declining inventories in the coming months.
The price of oil futures rose slightly on Monday due to analyst predictions of a summer supply deficit. Analysts at Goldman Sachs expect strong summer demand for transportation fuel and cooling to push the market into a deficit of 1.3 million barrels per day by the third quarter, causing Brent oil prices to rise to $86 per barrel.
While oil prices did fall last week after OPEC+ announced production increases, analysts believe OPEC+ has the ability to adjust production as needed to maintain market stability. Goldman Sachs analyst Daan Struyven sees a potential price floor of $75 per barrel for Brent oil, supported by increased demand at lower prices. However, a ceiling of $90 per barrel is also possible due to higher-than-expected global stockpiles and the upcoming OPEC+ production hikes.
Market sentiment towards oil prices is currently quite bearish, with long positions (bets on rising prices) at the lowest level since 2011 and short positions (bets on falling prices) near record highs according to UBS. However, UBS analyst Giovanni Staunovo believes this pessimism is unwarranted. He expects inventories to decline and demand to rise significantly in the coming months, potentially by 2 to 2.5 million barrels per day by August.
The oil market is now watching key events this week, including a Federal Reserve meeting and inflation data on Wednesday, as well as oil market reports from OPEC and the International Energy Agency on Tuesday and Wednesday respectively. These reports and events could significantly impact future oil price movements.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/06/10/crude-oil-prices-today.html
