Business

Winter weather could send oil to $100 per barrel, Bank of America analysts say

The rally in crude oil futures has stalled since June, however might resume once more and even hit $100 relying how chilly it will get, based on Financial institution of America analysts led by Francisco Blanch.

Entrance-month crude-oil futures
CL.1,
+1.25%

rose as excessive as $75 per barrel in June, however since then have fallen as little as the low 60s, and extra just lately are buying and selling round $70 a barrel.

The Financial institution of America analysts say that elevated manufacturing from Saudi Arabia and different OPEC+ members have offset enhancing demand. “However the occasional oil value struggle, OPEC+ is appearing once more to stabilize oil costs because it has finished traditionally,” mentioned the analysts.

However as pure gasoline
NG00,
+0.51%

and different power costs rise, chilly climate might immediate switching into oil, driving up crude. In Asia, there’s an estimated 1.5 million barrels per day of unused gas oil energy technology capability, and Europe is residence to almost 300,000 barrels a day of gas oil energy technology capability. The U.S. additionally has “honest quantity” of capability to modify, the analysts say.

Apart from energy vegetation, switching could also be potential at industrial operations, and chilly climate might immediate extra demand for propane, heating oil and kerosene, notably in Japan and the U.S.

Individually, commodity strategists at Goldman Sachs say oil might “rally considerably,” notably if a deal on nuclear functionality with Iran falls aside.

Pointing to disappointing provide additions from OPEC+ producers, manufacturing in non-OPEC international locations weighed down by upkeep and challenge delays, and Hurricane Ida’s affect on U.S. manufacturing, the Goldman analysts say the market is in deficit, with the one remaining stock surplus relative to pre-COVID ranges in China. They reiterated an $80 value goal for the fourth quarter, with upside dangers to the primary half of 2022.

https://www.marketwatch.com/story/winter-weather-could-send-oil-to-100-per-barrel-bank-of-america-analysts-say-11631526876?rss=1&siteid=rss | Winter climate might ship oil to $100 per barrel, Financial institution of America analysts say

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