Oil Ignores U.S. Weekly Build to Focus on Goldman’s $90 Call

imageCommodities1 hour ago (Sep 29, 2021 02:59PM ET)

(C) Reuters.

By Barani Krishnan

Investing.com – Goldman Sachs (NYSE:GS) has called for $90 a barrel, and the oil market seems bent on getting there, even if weekly U.S. inventory isn’t going to be as supportive.

The U.S. Energy Information Administration said crude stockpiles rose by 4.58 million barrels in the week to Sept. 24 versus forecasts for a drop of 2.2 million.

Instead of correcting substantially on the data, crude prices which have risen more than 10% since the start of September, fell only slightly on the data. There was, however, an overnight drop of 2% triggered by similar preliminary data from the American Petroleum Institute.

New York-traded West Texas Intermediate, the benchmark for U.S. oil, settled down 46 cents, or 0.6%, at $74.83 per barrel. It hit a session high of $75.79 after the EIA data, versus the overnight low of $73.73.

London-traded Brent crude, the global benchmark for oil, settled at $78.25 a barrel, down 45 cents, 0.6%. It reached a peak of $78.72 earlier, after an overnight bottom of $76.77.

Earlier in the week, Goldman raised its year-end forecast for Brent to $90 per barrel from $80, as damage from Hurricane Ida continued to shut-in at least 15% of production in the U.S. Gulf of Mexico.

Fewer headlines on hospitalizations from the Delta variant of Covid has also emboldened oil bulls, although the onset of fall and colder weather could bring in higher caseloads from here.

“Well, you know what Goldman Sachs called; so buy the dip!” John Kilduff, founding partner of New York energy hedge fund Again Capital, said with a chuckle. “We have a significant upward revision as well in weekly production estimates from the EIA. But none of that matters because it’s $90 oil that’s in everyone’s eyes.”

The EIA revised upwards by half a million barrels U.S. crude production for the week ended Sept. 24, estimating output at 11.1 million barrels per day versus a previous 10.6 million.

In other inventory data, the EIA said gasoline inventories rose by 193,000 barrels, versus the forecast draw of 1.5 million. It was the second straight weekly build for gasoline stockpiles, which rose by a beefy 3.48 million in the previous week.

Stockpiles of distillates, which include diesel and heating oil, gained 384,000 in the latest week against an expected deficit of 1.4 million.

Oil Ignores U.S. Weekly Build to Focus on Goldman’s $90 Call

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