Oil near 13-month high over US output restart

Oil was up Tuesday morning in Asia, climbing to an almost 13-month high and building on the previous session’s gains.

US output’s recovery from the previous week’s cold snap in Texas and surrounding areas that impacted crude production is taking time. Shale oil producers estimate that it could take up to two weeks to restart more than two million barrels per day of crude output thanks to frozen pipes and power supply interruptions.

Brent oil futures rose 1.38% to $65.25 by 11:25 PM ET (4:25 AM GMT) and WTI futures jumped 1.38% to $62.55.

“The positive momentum continues in the oil complex, with investors unabashedly predisposed to a bullish view … several significant oil price revisions were announced overnight and may have contributed to the rally of over 3%,” Axi chief global markets strategist Stephen Innes said in a note.

Goldman Sachs (NYSE:GS) commodities research raised its Brent crude oil price forecasts by $10 for the second and third quarters of 2021, with lower-than-expected inventories, higher marginal costs to restart upstream activity and speculative inflows contributing to the raise.

Fellow investment bank Morgan Stanley (NYSE:MS) also forecast Brent futures to climb to $70 in the third quarter on the back of “signs of a much-improved market”, including prospects of improving demand.

The black liquid was also boosted by the Organization of the Petroleum Exporting Countries (OPEC) and US oil companies recording a limited rebound in shale oil supply in 2021. The decision by top US producers to freeze output despite rising prices also stands to benefit OPEC and its allies, also known as OPEC+.

Investors await US crude oil supply data from the American Petroleum Institute, due later in the day.

First published on Investing.com