An IG analyst says the right price for crude oil currently is about $70 a barrel, where it is now
25 October 2024 - 07:32
by Florence Tan
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Singapore — Oil prices nudged higher on Friday and were on track for a weekly gain of more than 1%, as tensions in the world’s top oil-producing region, the Middle East, and a restart in Gaza ceasefire talks in the coming days kept traders on edge.
Brent crude futures climbed 18 cents, or 0.2%, to $74.56 a barrel by 3.42am GMT while US West Texas Intermediate crude was at $70.34 a barrel, up 15c, or 0.2%.
“We remain of the view that the right price for crude oil currently is about $70 where it is now, as we await fresh price drivers, including the outcome of China’s NPC Standing Committee meeting as well as Israel’s response to Iran’s October 1 missile attack,” IG market analyst Tony Sycamore said in a note, referring to WTI prices.
Both benchmarks settled down 58c a barrel in the previous session after prices fluctuated against expectations of heightened or reduced tensions in the Middle East.
Oil traders are waiting for Israel’s response to a missile attack by Iran on October 1 that may involve hitting Tehran’s oil infrastructure and disrupt supplies, although reports said Israel would strike Iranian military, not nuclear or oil, targets.
US and Israeli officials are set to restart talks for a ceasefire and the release of hostages in Gaza in the coming days. Previous attempts to reach a deal have failed.
US secretary of state Antony Blinken said on Thursday that the US dids not want a protracted Israeli campaign in Lebanon, while France had called for a ceasefire and focus on diplomacy.
Ceasefire talks have a small net negative effect on oil prices, Sycamore said, adding the focus is more on the conflict in Lebanon and Israel’s potential response to Iran.
Investors are also eyeing more clarity on Beijing’s stimulus policies, although analysts do not expect such measures to provide a major boost to oil demand from China, the world’s number two consumer.
On Thursday, Goldman Sachs left its oil, natural gas and coal price forecasts unchanged, estimating Chinese stimulus boosts to energy prices that were modest relative to bigger drivers such as oil supply from the Middle East and northern hemisphere winter weather for natural gas.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil set for weekly gain due to Middle East risks
An IG analyst says the right price for crude oil currently is about $70 a barrel, where it is now
Singapore — Oil prices nudged higher on Friday and were on track for a weekly gain of more than 1%, as tensions in the world’s top oil-producing region, the Middle East, and a restart in Gaza ceasefire talks in the coming days kept traders on edge.
Brent crude futures climbed 18 cents, or 0.2%, to $74.56 a barrel by 3.42am GMT while US West Texas Intermediate crude was at $70.34 a barrel, up 15c, or 0.2%.
“We remain of the view that the right price for crude oil currently is about $70 where it is now, as we await fresh price drivers, including the outcome of China’s NPC Standing Committee meeting as well as Israel’s response to Iran’s October 1 missile attack,” IG market analyst Tony Sycamore said in a note, referring to WTI prices.
Both benchmarks settled down 58c a barrel in the previous session after prices fluctuated against expectations of heightened or reduced tensions in the Middle East.
Oil traders are waiting for Israel’s response to a missile attack by Iran on October 1 that may involve hitting Tehran’s oil infrastructure and disrupt supplies, although reports said Israel would strike Iranian military, not nuclear or oil, targets.
US and Israeli officials are set to restart talks for a ceasefire and the release of hostages in Gaza in the coming days. Previous attempts to reach a deal have failed.
US secretary of state Antony Blinken said on Thursday that the US dids not want a protracted Israeli campaign in Lebanon, while France had called for a ceasefire and focus on diplomacy.
Ceasefire talks have a small net negative effect on oil prices, Sycamore said, adding the focus is more on the conflict in Lebanon and Israel’s potential response to Iran.
Investors are also eyeing more clarity on Beijing’s stimulus policies, although analysts do not expect such measures to provide a major boost to oil demand from China, the world’s number two consumer.
On Thursday, Goldman Sachs left its oil, natural gas and coal price forecasts unchanged, estimating Chinese stimulus boosts to energy prices that were modest relative to bigger drivers such as oil supply from the Middle East and northern hemisphere winter weather for natural gas.
It forecasts Brent in the $70 to $85 range.
Reuters
Gold enjoys boosted appeal on geopolitical risk
Dollar and US bond yields drop amid election risks
MARKET WRAP: PGM miners drive JSE gains
SA still Africa’s financial markets leader but faces stiff competition
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.