Oil prices have edged up after American investment banking company Goldman Sachs predicted that the market is in deficit.
Prices were also supported after a new storm started developing in the Gulf of Mexico.
Brent crude LCOc1 rose by $0.27, or 0.6%, to reach $43.57 a barrel, while US West Texas Intermediate (WTI) CLc1 futures were up by $0.23, or 0.6%, to settle at $41.20 a barrel, Reuters reported.
In a new report, Goldman Sachs said that the recent storage on crude oil tankers for future delivery was ‘driven by transient inventory allocation dynamics’ rather than an increase in world shares that will indicate the market is oversupplied.
Goldman Sachs added: “We estimate that the oil market remains in deficit with speculative positioning now at too low levels.”
The investment bank estimated that the market would have a deficit of three million barrels per day (Mbpd) by Q4-2020 and expected Brent to reach $49 a barrel by the end of this year and $65 a barrel by Q3-2021.
Meanwhile, a tropical depression started building in the western part of the Gulf of Mexico and could become a hurricane in the coming days.
Saudi Arabian Energy Minister Prince Abdulaziz bin Salman warned traders against betting heavily in the oil market.
These comments were made by the minister after a virtual meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, together known as OPEC+.
According to the latest meeting, OPEC said that it is adhering to 7.7Mbpd of output cut to support prices and did not announce any further cuts.
OPEC stated: “The committee reviewed the crude oil production data for August 2020 and welcomed the positive performance in overall conformity for participating OPEC and non-OPEC countries of the DoC, which was recorded at 102% in August 2020, including Mexico as per the secondary sources.
“The JMMC reiterated the critical importance of adhering to full conformity and compensating overproduced volumes as soon as possible.”