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

Published 09/29/2021, 11:23 AM
Updated 09/29/2021, 02:59 PM
© Reuters.

© 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 meaningfully on the data, crude prices which have risen more than 10% since the start of September, fell only slightly. 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.

 

Latest comments

where supply tightens gone? now oil gamblers running to goldman sucks "investors"?
Goldman is conservative by $7-$10 in December.
goldie must be long.. grin
I don't think oil's rocket is just about Goldman's call...
No, I agree it's not. But Goldman has just given another reason for a rally now bordering on insanity. No price that's too low or too high is ever good for oil. One can argue that not too long ago (8 years actually), oil was north of $100 a barrel. But we probably had a better landing then for the US economy compared to now. Of all the forecasts made on oil, Goldman's is probably the most damaging because Currie and Co tend to keep perpetuating their hype with cherrypicked data and more often than not, the influence peddled (Oh Goldman said it!) tends to push the market towards the target, making it a sell-fulfilling prophecy. Yes, we had Ida (which frankly should have never dragged on this long) and other production/pipeline snafus. But Goldman has just thrown a wok of oil at the fire, so to speak.
are you out of your mind? no one can ignore the facts!
 , :) how can inventory increase be ignored and a questionable forecast be focused at the same time? the interesting is: I 100% agree with you about Cherry-picking :)
I should have thanked you firstly for the news,
 Thanks much for your analytical mind. Bests.
"...EIA numbers are up" I meant there are down.
"the EIA said gasoline inventories rose by 193,000 barrels" read again! That was API. EIA numbers are up.  However, it does not matter. I agree with your general theme, it is going up despite negative news - like Evergrande.  We now have a OPEC+++, a global OPEC, with IOCs, US independents, everyone realizing that they can make more money by not increasing production and manipulating the market.
Hello Emerson, here's our page on the EIA gasoline inventories: https://www.investing.com/economic-calendar/gasoline-inventories-485
$190 would be better. Tic-toc.
Perfect title for what’s been going on in the markets over the last 2 years. Reality is nothing.
Manipulation again and again... Awesome
thanks
Keep buying DRIP you will thank me in a month....
Wo
How can a weekly estimate be this wrong?
Todd, Ida has messed up everything, that's why. The squeeze was there but now it's gross because of this overdone shut-ins.
Goldman want to sell to small retailers investors . The oil will decline .
+500% since being 15$
Looks like you're typical "buy the rumour, sell the fact" trade.
I don't trade. But I expect some sensibility, given a 2nd weekly build in gas and the first addition in 8 weeks.
For crude that is (first addition in 8 weeks)
Big oil just reducing production to hurt economy and ultimately hurt Biden Admin …. What a joke. Big big backfire
Trump won !!!
What are you talking about?? Big oil love's Biden and Biden loves them back. Shutting down Keystone XL was only the biginning of their love affair. Read some news and check some charts.
bottleneck of cargo ships burning fuel. once offloaded trains, planes and trucks will be burning fuel faster than normal to try and restock depleted inventory all over America. Oil is going up to $90 sooner than later.
This crash will be epic.... keep buying PIGS.... I love bacon
Good luck because GS will refund your loss? Lol
You're missing the sarcasm.
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