Futures in New York rose as much as 1.3 percent after climbing the most in eight months on Tuesday. President Donald Trump has intensified preparations for a response to a suspected chemical weapons attack in Syria, a move that could place the U.S. in direct conflict with Russian forces. While the Middle East country’s own oil production is limited, prices often respond to the risk of war in a region that holds almost half of the world’s crude reserves. “The focus is on the West’s probable military strike against the Syrian regime,” said Carsten Fritsch and Eugen Weinberg, analysts at Commerzbank AG in Frankfurt. Click Read More below for additional information.
Oil jumped after Goldman Sachs Group Inc. boosted a price forecast by a third and said global crude markets have probably rebalanced.
West Texas Intermediate futures added 0.8 percent in New York. Strong fuel demand, output cuts by OPEC and collapsing Venezuelan production have helped clear a glut six months earlier than anticipated, Goldman analysts Damien Courvalin and Jeff Currie said in a report, raising their six-month price expectation to $82.50 a barrel from $62.
“Venezuela pulled OPEC production significantly below target in January,” Commerzbank AG said in a note. The group is “profiting considerably from the involuntary production outages in Venezuela at present, without which the oil market would be oversupplied.”
Last week, U.S. oil output surged above 10 million barrels a day for the first time in more than four decades, while nationwide stockpiles ended 10 consecutive declines, government data showed Wednesday.
The run of inventory declines — as well as OPEC cuts and a weaker dollar — helped send prices to a fifth month of gains in January, the longest such streak since 2011. Still, the gain was seen spurring American drillers to pump more, prompting fears that stockpiles would once again start to build. Additionally, inventory increases were on the horizon due to seasonal refinery maintenance.
more at: https://www.bloomberg.com/news/articles/2018-02-01/oil-extends-gains-near-65-after-u-s-gasoline-inventories-drop