Oil Rises On Supply Deficit Forecast And Storm In Gulf

Both contracts 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.

The investment bank predicted the market would be in a deficit of 3 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.