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 on the data, crude prices which have risen more than 10% since the start of September, tacked on more gains, reaching a solid green bar on the screen some 30 minutes after the EIA data release. An overnight drop of 2% triggered by similar preliminary data from the American Petroleum Institute seemed a distant memory.
New York-traded West Texas Intermediate, the benchmark for U.S. oil, was up 40 cents, or 0.5%, at $75.69 per barrel by 11:05 AM ET (16:05 GMT). The overnight low was $73.73.
London-traded Brent crude, the global benchmark for oil, showed a 29-cent, or 0.4%, gain to $78.64, after the pre-open 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.