Oil hits 2-week high on Goldman Sachs’s forecasts, OPEC+ statements

Oil prices rose in European trade on Friday, extending gains for the fourth straight day, and hit a 2-week high, thanks to Goldman Sachs’s estimates of a deficit in market during the fourth quarter, the OPEC Plus collation's statements about compliance to the output cut agreement, in addition to a drop in the US crude inventories.

The US crude rose 1.3% to the highest since September 4 at $41.46 a barrel, after opening at $40.93, and hit a session-low of $40.82, and Brent rose 1.3% to the highest since September 4 at $43.78, after it opened at $43.22, with a low of $43.14.

The US crude jumped 2% yesterday, and Brent crude futures gained 2.3%, posting their third straight daily gain, The US Energy Administration weekly report. 

Goldman Sachs said in its new energy market report that the recent storage of oil tankers of crude for future delivery was driven by transient inventory allocation dynamics rather than an increase in world shares that will indicate the market is oversupplied.

The American bank added "we estimate that the oil market remains in deficit with speculative positioning now at too low levels."

The bank estimated that the oil market would see a deficit of 3 million barrels per day in the fourth quarter, and expected Brent to reach $49 a barrel by the end of this year, and to reach $65 by the third quarter of 2020.

OPEC-Plus coalition stressed on Thursday that the group will take action on members who do not comply with their quotas of the output cut agreement.

The global coalition is implementing the second phase of the cut agreement, cutting about 7.7 million bpd until the end of December.