Commodities
Oil price rally steers crude towards weekly gain
By Arunima Kumar
(Reuters) – Oil prices rose about 1% on Friday, extending their rally and putting crude on course for a weekly gain on the back of output disruption in the U.S. Gulf of Mexico after Hurricane Francine forced the evacuation of production platforms.
futures were up 66 cents, or 0.92%, at $72.63 a barrel by 1217 GMT. U.S. West Texas Intermediate crude futures rose 78 cents, or 1.13%, to $69.75.
If those gains hold, both benchmarks will break a streak of weekly declines despite Brent crude dipping below $70 a barrel on Tuesday for the first time since late 2021.
At current levels, Brent is set for a weekly increase of about 2.2% while WTI is poised to register a 3.1% gain.
“Ongoing supply disruptions in Libya and larger than expected disruption in the Gulf of Mexico due to Hurricane Francine keep the oil market tight,” said UBS analyst Giovanni Staunovo.
“Further support is likely coming from short-covering activity as result of rebounding prices.”
A weaker U.S. dollar also helped support oil prices. The currency fell to a one-week low on Friday, making dollar-denominated commodities cheaper for holders of other currencies.
Oil producers assessed damage and conducted safety checks on Thursday as they prepared to resume operations in the U.S. Gulf of Mexico. Official data showed that nearly 42% of the region’s oil output was shut in as of Thursday.
UBS analysts forecast September output in the region will fall by 50,000 barrels per day (bpd) from the previous month while FGE analysts estimated a drop of 60,000 bpd to 1.69 million bpd.
“If production delays were to prove to be short-lived and damages to oil platforms were to be minimal, those gains may be unwound, as the broader demand outlook continues to serve as a key headwind to limit any sustained recovery,” IG market strategist Yeap Jun Rong said in an email.
Both the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) lowered their demand growth forecasts this week, citing economic struggles in China, the world’s largest oil importer.
In the United States, oil stockpiles also rose across the board last week as crude imports grew and exports dipped, the Energy Information Administration (EIA) said on Wednesday.
In the meantime, investors are looking ahead to the U.S. Federal Reserve’s policy meeting over Sept. 17-18 and a possible cut to interest rates.
Investing.com — Goldman Sachs has delayed its gold price target of $3,000 per ounce, pushing the forecast to mid-2026 instead of the previous expectation for December 2025.
The revision comes as Goldman’s economists now foresee fewer Federal Reserve rate cuts in 2025, with a smaller anticipated reduction of 75 basis points, compared to the 100 basis points expected previously.
The change is expected to slow the pace of ETF gold buying, leading to a delayed rise in gold prices.
In a research note on Monday, Goldman Sachs stated, “We now forecast that gold will rise about 14% to $3,000/toz by 2026Q2 (vs. Dec25 previously) and now expect it to reach $2,910/toz by end-2025.”
While central bank demand for gold remains a key driver of the bullish forecast, contributing a projected 12% increase by 2026Q2, weaker-than-expected ETF flows following the resolution of the U.S. elections have dampened price expectations, according to the investment bank.
Speculative demand, which surged ahead of the U.S. election, has since moderated, keeping prices range-bound.
Goldman Sachs maintains that structural factors, particularly “structurally higher central bank demand,” will provide support for gold prices, even as ETF demand grows at a slower pace.
Central bank purchases, particularly following the freeze of Russian assets, have surged, and Goldman expects this trend to continue, with monthly purchases averaging 38 tonnes through mid-2026, more than double the pre-freeze level.
Despite this positive outlook, the analysts cautioned that the risks to their forecast remain balanced.
They explained that a “higher for longer” federal funds rate represents the main downside risk, while a potential U.S. recession or “insurance cuts” could drive prices above the $3,000 mark.
Investing.com — European prices have seen a minor decrease in early trade but overall continue to remain high for the month. This is largely due to predictions of colder weather and concerns over supply following the cessation of Russian gas transit via Ukraine.
The benchmark Dutch TTF contract has experienced a 1.2% decrease, now hovering at 49 euros per megawatt hour. Last week, it had broken the 50 euros mark following the confirmation of halted Russian pipeline flows through Ukraine. This halt was due to the expiration of Gazprom (MCX:)’s transit deal.
Analysts at ING have noted that the European gas market is receiving additional support from the forecast of colder-than-usual weather for the next two weeks. This could potentially lead to a quicker-than-expected decrease in storage levels.
They further noted that while the current storage levels should be sufficient for Europe to get through this winter without issue, the refilling of storage during the injection season could prove to be a more substantial task than last year.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
By Ahmad Ghaddar
LONDON (Reuters) – Oil prices steadied at their highest since mid-October as colder weather spurred buying while further support came from expectations of tighter sanctions on Iranian and Russian oil exports.
futures gained 22 cents, or 0.3%, to $76.73 a barrel by 1133 GMT, their highest since Oct. 14.
U.S. West Texas Intermediate crude was up 23 cents, or 0.3%, at $74.19 for its highest since Oct. 11.
Oil had previously chalked up five sessions of gains, buoyed by hopes of rising demand after colder weather in the Northern Hemisphere and more fiscal stimulus to revitalise China’s faltering economy.
Brent crude was supported by colder than normal weather in northwest Europe and the United States, a rally in prices and higher refining profit margins, said SEB analyst Bjarne Schieldrop.
Investors are also awaiting economic news for more clues on energy consumption and the U.S. Federal Reserve’s interest rate outlook. Minutes of the Fed’s last meeting are due on Wednesday and the December payrolls report is scheduled for Friday.
Meanwhile, Saudi Aramco (TADAWUL:), the world’s top oil exporter, has raised crude prices in February for buyers in Asia, the first increase in three months. A rise in these prices usually indicates firmer demand expectations.
On the supply front, stronger Western sanctions on Iranian and Russian oil shipments are a distinct possibility.
The Biden administration plans to impose more sanctions on Russia over its war on Ukraine, taking aim at its oil revenues with action against tankers carrying Russian crude, two sources with knowledge of the matter said on Sunday.
Goldman Sachs expects Iranian oil production and exports to fall by the second quarter as a result of expected policy changes and tighter sanctions from the administration of incoming U.S. President Donald Trump.
Output at the OPEC producer could drop by 300,000 barrels per day (bpd) to 3.25 million bpd by the second quarter, the bank said.
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