By fxtimes.com
Highlights:
- WTI advances 1.6% to $50.33/barrel as Cushing, Oklahoma stockpiles rose less than forecast.
- Goldman Sachs forecasts WTI to fall to a low of $40 a barrel in the near-term, rebounding to $65/barrel in 2016.
- Goldman Sachs also predicted renewed pressure for Brent crude, which declined 0.75% to $59.29/barrel.
US crude prices rallied on Monday after industry data pointed to only a modest supply build up at the Cushing, Oklahoma delivery point, although prices will probably reverse their recent gains as inventories begin to rise again, according to Goldman Sachs.
West Texas Intermediate (WTI) for April delivery advanced 1.6 percent to $50.33 a barrel, narrowing its discount to Brent to less than $9. Brent crude slipped 0.75 percent to $59.29 a barrel.
Stockpiles at the Cushing delivery hub increased by 157,000 last week, well below forecasts. Oil speculators are increasingly concerned about record buildup in US stockpiles, which could further undermine oil prices. US crude inventories have increased for nine straight weeks, shattering previous records.
Oil prices rebounded sharply at the start of the year, advancing around 30 percent between January and February. Supply disruptions in the Middle East, higher winter demand and speculation prices may have already bottomed out supported the rally. However, WTI is expected to reverse its recent gains and fall to a low of $40 a barrel in the near-term, according to revised estimates from Goldman Sachs.
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“While we continue to forecast a strong demand recovery in 2015, we believe that sequentially weaker activity, the end of winter and the end of potential restocking demand, will lead to a sequential deceleration in demand-growth as we enter the spring,” the multinational investment bank said on Monday.
WTI is expected to rise to $65 a barrel for 2016, although the bank warned the outlook was “skewed to the downside.”
Goldman Sachs also predicted renewed pressure for Brent crude, stemming from lower demand from Asian economies, which are switching to liquefied natural gas for power generation.
By fxtimes.com
