Brent Oil to trade at only $90 by year-end – Commerzbank

Following last week’s massive setback, the latest recovery of oil prices is likely to falter. In the view of strategists at Commerzbank, oil prices should continue to decline until the end of the year.

Market will be amply supplied in the coming months

“The oil market should be more than amply supplied for the time being.”

“We now envisage a Brent price of only $90 by year-end.”

“The EU oil embargo that will come into force at the end of the year will probably prevent any further price slide.”

WANT TO DIRECT TALK OUR EXPERT CONTACT MONEY LIFE RESEARCH

Oil prices rise as chances of OPEC+ supply boost dim

Oil prices rose in European trading on Friday as attention turned to next week's OPEC+ meeting and expectations that it will dash U.S. hopes for a supply boost.

Brent crude futures for September settlement, due to expire on Friday, gained $2.30 to trade at $109.44 a barrel by 1200 GMT after touching their highest since July 5. The more active October contract was up $2.24 at $104.07.

U.S. West Texas Intermediate (WTI) crude futures rose $2.20 to $98.62 a barrel.

Both contracts are set for a second monthly loss, however, down 4.7% and 6.8% respectively.

A weaker dollar and stronger equities also lent support on Friday. A fall in the dollar makes oil cheaper for buyers with other currencies.

Global equities, which often move in tandem with oil prices, were up on the hope that U.S. monetary tightening would not be as hawkish as initially expected after disappointing growth figures. [MKTS/GLOB]

A Reuters survey forecast Brent and U.S. crude would average $105.75 and $101.28 a barrel respectively this year. [OILPOLL]

Front-month Brent futures are selling at a rising premium to later-loading months in a market structure known as backwardation, indicating tight current supply.

"The oil market in Europe is considerably tighter than in the U.S., which is also reflected in the sharply falling Brent forward curve," said Commerzbank (ETR:CBKG) analyst Carsten Fritsch.

A key driver will be the next meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together known as OPEC+, on Aug. 3.

OPEC+ sources said the group will consider keeping oil output unchanged for September, with two OPEC+ sources saying a modest increase would be discussed.

A decision not to raise output would disappoint the United States after U.S. President Joe Biden visited Saudi Arabia this month hoping to strike a deal to open the taps.

Analysts, however, said it would be difficult for OPEC+ to boost supply, given that many producers are already struggling to meet production quotas.

WANT TO DIRECT TALK WITH OUR EXPERT, REGISTER MONEY LIFE RESEARCH

Russia's Novak: Oil market is balanced but there are lots of uncertainties

Following his meeting with Saudi Arabia's energy minister, Russian Deputy Prime Minister Alexander Novak said on Thursday that they have discussed forecasts on oil prices.

"It is important to continue joint work at OPEC+ to avoid collapse on the oil market," Novak added and noted that the oil market is currently balanced while acknowledging that there were lots of uncertainties.

Market reaction

Crude oil prices showed no immediate reaction to these comments and the barrel of West Texas Intermediate (WTI) was last seen trading at $113.50, where it was down 2% on a daily basis.

WANT TO DIRECT TALK OUR MARKET EXPERT CONTACT MONEY LIFE RESEARCH

Shelling in Russia’s Bryansk region hits parts of oil terminal – Russian news agencies

Russian air defences prevented a Ukrainian aircraft from entering the Bryansk region on Saturday, Russian news outlets reported citing the region’s governor, adding that as a result shelling hit parts of an oil terminal and adjacent territory.

Russian air defences prevented a Ukrainian aircraft from entering the Bryansk region on Saturday, Russian news outlets reported citing the region’s governor, adding that as a result shelling hit parts of an oil terminal and adjacent territory.

“There are no victims,” RIA news agency cited the governor, Alexander Bogomaz, as saying. He added that a logistics building at the terminal was damaged.

Get daily news and market updates

JOIN  NOW: MONEY LIFE RESEARCH

 Saudi Feb crude exports hit near two-year high

Saudi Arabia's crude exports in February rose to 7.307 million barrels per day (bpd), the highest level since April 2020, official data showed on Monday.

Crude oil exports in February rose 4.4% from about 7 million bpd reported for January.

The world's largest oil exporter's February crude production also rose to its highest level in nearly two years at 10.225 million bpd from 10.145 million bpd in the previous month.

Saudi Arabia's domestic crude refinery throughput fell 0.271 million bpd to 2.506 million bpd in February while direct crude burn fell 111,000 bpd to 291,000 bpd.

Monthly export figures are provided by Riyadh and other members of the Organization of the Petroleum Exporting Countries (OPEC) to the Joint Organizations Data Initiative (JODI), which published them on its website.

Get Best News And Analysis with us!

JOIN NOW: MONEY LIFE RESEARCH