Oil Ignores U.S. Weekly Build to Focus on Goldman’s $90 Call By Investing.com
By Barani Krishnan
Investing.com – Goldman Sachs (NYSE:) has called for $90 a barrel, and the oil market seems bent on getting there, even if weekly U.S. inventory isn’t going to be as supportive.
According to the U.S. Energy Information Administration, crude oil stockpiles increased by 4.58million barrels during week ending Sept. 24, compared with forecasts of a decrease of 2.2 million.
Crude prices rose more than 10% over the previous week, instead of being corrected by the data. They reached a solid green line on the screen about 30 minutes after EIA’s data release. Similar preliminary data from American Petroleum Institute showed a drop overnight of 2.2%. It seemed distant.
New York-traded, which is the benchmark U.S. crude oil, had fallen to $75.25 per barrel at 11:32 am ET (16.32 GMT) After an overnight low of $73.73, it reached a session peak of $75.79.
London-traded crude, the global benchmark for oil, was at $78.25 a barrel, after reaching $78.72 earlier. Overnight, the bottom was $76.77.
Goldman increased its Brent year-end forecast to $90 per barrel from $80 earlier in the week as Hurricane Ida caused at least 15% of U.S. Gulf of Mexico production to halt.
Oil bulls have been encouraged by a lack of headlines about hospitalizations due to the Delta version of Covid. However, the arrival of autumn and cooler weather may lead to higher caseloads.
“Well, you know what Goldman Sachs called; so buy the dip!” John Kilduff, founding partner of New York energy hedge fund Again Capital, said with a chuckle. “We have a significant upward revision as well in weekly production estimates from the EIA. But none of that matters because it’s $90 oil that’s in everyone’s eyes.”
The EIA revised upwards by half a million barrels U.S. crude production for the week ended Sept. 24, estimating output at 11.1 million barrels per day versus a previous 10.6 million.
In other inventory data, the EIA said inventories rose by 193,000 barrels, versus the forecast draw of 1.5 million. This was the second consecutive weekly increase in gasoline stocks, after they rose by 3.48 million the week before.
Stockpiles of which also include diesel and increased by 384,000 this week to 1.4 million, according to the expected deficit.
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