Oil rises on supply deficit forecast and Gulf storm By Reuters

By Aaron Sheldrick

TOKYO (Reuters) – Oil prices rose for the fourth day in a row on Friday as Goldman Sachs (NYSE 🙂 estimated the market to be in deficit and a new storm began to build in the Gulf of Mexico, sending crude to a weekly profit of approximately 10%.

Brent crude () was up 36 cents, or 0.8%, at $ 43.57 a barrel at 0651 GMT, while US oil futures () were up 33 cents, or 0.6%, at 41 , $ 30 a barrel.

Both contracts have risen sharply this week after Hurricane Sally slashed US production and OPEC and its allies put in place measures to address market weakness.

Goldman Sachs said in a new report that recent storage in crude tankers for future delivery was “driven by transitory inventory allocation dynamics” rather than an increase in global inventories that would suggest the market is oversupplied.

“We estimate that the oil market remains in deficit with speculative positioning now at too low levels,” said analysts at Goldman Sachs.

The investment bank predicted that the market would be in a deficit of 3 million barrels per day (bpd) for the fourth quarter and reiterated its target for Brent to reach $ 49 by year-end and $ 65 by the third quarter. of the next year.

Meanwhile, a tropical depression formed in the western part of the Gulf of Mexico and could turn into a hurricane in the next few days, potentially threatening more US oil facilities.

Saudi Arabia’s energy minister also fired at traders, warning them not to bet against the oil market and promising that those who bet on oil prices would be hurt “like hell.”

Prince Abdulaziz bin Salman, OPEC’s most influential minister, made the remarks after a virtual meeting of a key panel of OPEC and its allies, led by Russia.

The Organization of the Petroleum Exporting Countries (OPEC) and other producers, who form the so-called OPEC + group, are cutting 7.7 million bpd of production to support prices.

OPEC + said on Thursday that the group will take action on members that are not complying with deep production cuts to support the market following a drop in fuel demand triggered by the coronavirus.

In the Gulf of Mexico, U.S. offshore drillers and exporters began a cleanup Thursday after Hurricane Sally weakened to a depression and began restarting idle rigs after shutting them down for five days.