Oil Prices Rise Again Due to Slow Recovery in US Production

Energy and environment

Jessica jaganathan

SINGAPORE (Reuters) – Oil prices rose again on Tuesday after surging in the previous session, remaining near a more than 13-month high as US production was slow to return after a deep freeze in Texas which shut down crude production last week.

Shale oil producers in the southern United States could take at least two weeks to restart the more than 2 million barrels per day (b / d) of crude production that has been shut down due to cold weather as the Frozen pipes and interruptions in the power supply are slowing their recovery, sources mentioned.

Brent futures were up 28 cents, or 0.4%, to $ 65.52 a barrel at 0102 GMT, while U.S. crude oil rose 14 cents, or 0.2%, to 61 , $ 84 per barrel. Both benchmarks rose nearly 4% in the previous session.

“The positive momentum continues in the oil complex, with investors undoubtedly predisposed to a bullish outlook,” Stephen Innes, chief global markets strategist at Axi said in a note.

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

Goldman Sachs Commodities Research has raised its Brent crude oil price forecast by $ 10 for the second and third quarters of 2021, citing lower expected inventories, higher marginal costs to restart upstream activity and speculative entries.

The Bank of Wall Street expects Brent prices to hit $ 70 a barrel in the second quarter from $ 60 it previously predicted and $ 75 in the third quarter from $ 65 earlier.

Morgan Stanley expects Brent prices to climb to $ 70 per barrel in the third quarter due to “signs of significant market improvement,” including the prospect of improving demand.

Also supporting prices, OPEC and US oil companies see a limited rebound in shale oil supply this year as major US producers freeze production despite rising prices, a move that would help OPEC and its allies.

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