Crude oil prices failed to maintain their initial rise after Saudi Arabia’s decision to cut production, but Jeff Currie of Goldman Sachs believes that this move eventually led to a withdrawal of crude oil stocks, Submit prices to $90 before the end of the year.
“You will see significant draws in physical stocks due to OPEC production cuts, particularly in the third and fourth quarters, [which will] We pushed down to the $90 low,” Corey told Bloomberg this week.
Currie said high interest rates have made it too expensive to keep oil in storage, and investor interest likely won’t return until inventories start to run low.
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Focusing on the fundamentals, Citi analysts said Saudi cuts would be the same It is unlikely to sustain gains to highs of the 80s or low 90s, indicating weaker demand and stronger non-OPEC supply by the end of the year.
Over the course of the week, crude oil prices posted their second consecutive weekly decline, as more disappointing economic data from China added to doubts about energy demand growth after Cut Saudi Arabia alone.
Nymex crude in the first month (cl1:com) for July delivery ended -2.2% for the week to $70.17 per barrel and Brent crude for August (carbon dioxide: com) closed -1.7% to $74.79 a barrel, the sixth weekly loss out of the past eight for both benchmarks.
WTI and Brent both lost more than $3 a barrel on Thursday, following reports from the United States and Iran. Progress towards a nuclear agreement would lead to more supply; Prices recovered some of their losses after both countries denied the report.
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The US Department of Energy said late Friday that it plans to do so Buying 3 million barrels of crude oil for the Strategic Petroleum Reserve, where oil is purchased at an average price of about $73 per barrel.
The Energy Department also said it had launched a new order for another 3 million barrels for delivery to SPR’s Big Hill site in Texas for delivery in September.
“Next week will be big for oil,” said Edward Moya of Oanda, as interest rate decisions from the Federal Reserve, European Central Bank and People’s Bank of China should determine the short-term outlook for the global economy.
Despite the decline in crude oil prices, the energy sector (New York:xle) made gains for the week just ended, +1.8%.
The top 5 gainers in energy and natural resources over the past 5 days: (AMTX) + 34.7%(WPRT) +28.9%(City) +23.4%(WHD) +14.1%(PBR.A) +13.6%.
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The 4 largest losses in energy and natural resources during the past 5 days: (USGO) -17%(AUMN) -13.9%(Wave) -12.8%(Battle) -12%.
