Investing.com — Oil prices rose Monday after three straight weeks of losses, as hopes grow that rising demand over the summer could tighten crude supply in coming months.
At 2:12 PM ET (18:12 GMT), the stock rose 2.3% to $81.49 per barrel, while it rose 2.7% to $77.58 per barrel.
The summer question hopes to be central
Concerns about supply exceeding demand pushed bearish bets on crude to near record highs, UBS said, citing a recent Commitment of Traders reporter, although he added that the positioning was too pessimistic as crude supply oil is likely to drop during the summer months.
The Commitment of Traders, a gauge of traders’ positions, for the week ending June 4 showed that 38.5 million barrels had been added to bets on the oil price decline, while about 70.5 million barrels were bullish bets were closed, bringing the short position close to the record. highlights.
“We think this is overly pessimistic,” UBS said, predicting that oil inventories are “likely to point lower in the coming weeks.” as the seasonal surge in crude oil demand is underway during the summer.
Expectations for a pick-up in summer demand come just a day ahead of OPEC’s Tuesday release, with the cartel set to give its outlook on annual oil supply and demand.
The International Energy Agency will also publish this on Thursday.
Fed meeting, inflation data available as dollar falls
The dollar reined in some gains but had little impact on oil prices as cautious trading got underway ahead of Wednesday’s Federal Reserve decision, which will likely see the central bank keep rates high and signal fewer rate cuts for the year.
The Fed is widely expected to keep interest rates stable. But any signals of interest rate cuts will be closely watched.
Consumer price index inflation data will also be released on Wednesday, which is likely to play a role in the central bank’s outlook.
A weaker dollar boosts oil demand by making the commodity more attractive to international buyers.
Goldman is sticking to a tight range
However, despite the numerous factors impacting the crude oil market, Goldman Sachs remains committed to a range of $75-$90 per barrel this year.
“We still see $75/bbl as a bottom under Brent. First, physical demand for oil, including from China and the US SPR, tends to rise when prices fall. Second, financial demand is likely to increase significantly, even though it is currently very low.
speculative positioning normalizes. Third, US supply will remain price-sensitive, and OPEC can delay, pause or reverse its plan to increase production if necessary to stabilize the market. “In addition, OPEC’s agreement on new production baselines until 2026 signals stronger cohesion, further reducing the likelihood of much lower prices,” the bank said in a June 9 note.
As for the $90 per barrel ceiling, “OPEC has announced a data-dependent plan to gradually phase out voluntary production cuts starting in the fourth quarter as the market tightens.”
(Peter Nurse, Ambar Warrick contributed to this article.)
