Investing.com – Crude oil prices settled higher shrugging off recent data pointing to growing US supplies and output as Goldman Sachs revised upward its forecast for oil prices for the year.
On the New York Mercantile Exchange crude futures for March delivery rose 1.65% to settle at $65.80 a barrel, while on London's Intercontinental Exchange, Brent gained 1.00% to trade at $69.55 a barrel.
Goldman Sachs revised upward its three-, six- and twelve-month Brent oil price forecasts to $75, $82.50 and $75 a barrel respectively, from $62 previously, amid expectations for a "speedy market rebalancing."
The bank’s bullish outlook comes against the backdrop of rising US oil production to 10 million barrels per day, the highest in nearly half a century. Goldman Sachs did, however, warn that it expects a dip in oil prices in the near-term as U.S. shale producers pump more oil to take advantages of high prices which followed a sharp reduction in global inventories.
The bank said it expects Brent-WTI differential for the second half of 2018 to 2019 to widen to $5.50 a barrel, citing risks of further widening this year.
This, in turn, could reaffirm demand for crude oil exports, which have ticked lower in recent weeks, leading to a build in US supplies for the first time in 11 weeks.
The price difference between international benchmark Brent crude and U.S. crude narrowed to about $4 a barrel in January from roughly $7 in December.
Inventories of U.S. crude rose by 6.776 million barrels for the week ended Jan. 26, well above expectations for a build draw of 126,000 barrels. That was the biggest increase in US stockpiles in ten months.