TOKYO: Oil prices rose for a fourth straight day on Friday as Goldman Sachs estimated the market is in deficit and a new storm started building in the Gulf of Mexico, putting crude on track for a weekly gain of about 10 per cent.
Brent crude was up 27 cents, or 0.6 per cent, at $43.57 a barrel while US oil futures gained 23 cents, or 0.6 per cent, to $41.20 a barrel.
Both contracts dipped at the start of the day but have risen sharply this week after Hurricane Sally cut U.S. production and OPEC and its allies laid out steps to address market weakness.
Goldman Sachs said in a new report that recent storage on oil tankers of crude for future delivery was “driven by transient inventory allocation dynamics” rather than a rise in global stocks that would suggest the market is oversupplied.
“We estimate that the oil market remains in deficit with speculative positioning now at too low levels,” Goldman Sachs analysts said.
Deficit
The investment bank predicted the market would be in a deficit of three million barrels per day (bpd) by the fourth quarter and reiterated its target for Brent to reach $49 by the end of the year and $65 by the third quarter of next year.
The Saudi energy minister also fired a shot at traders warning them not to bet against the oil market and pledging those who gamble on oil prices would be hurt “like hell”.
Prince Abdulaziz bin Salman made the comments after a virtual meeting of a key panel of OPEC and allies, led by Russia.
OPEC and other producers, making up the so-called OPEC+ group, are cutting 7.7 million bpd of output to support prices. OPEC+ said on Thursday the group would take action on members not complying with deep output cuts to support the market following a coronavirus-led slump in fuel demand.