The oil market is oversold: Analyst
Oil headed for its biggest weekly gain of the year as disruptions to Iraqi exports tightened the market and inflation came in lower than expected to ease some economic worries.
Crude prices have risen more than 9 per cent this week, the most since Oct. 2022. The rally has been fueled by the shutdown of about 400,000 barrels a day of Iraqi flows amid a dispute between Baghdad and the Kurdistan region. Also lending support, a key gauge of U.S. inflation rose less than expected last month, suggesting an ending in sight of interest rate hikes from the Federal Reserve.
Despite this week’s surge, oil is still on track for a fifth monthly loss, primarily due to the banking crisis that rippled through markets in recent weeks, though the worst of the turmoil appears to be over. Resilient Russian oil supply and strikes in France that have curbed crude demand have restrained oil from breaking into the US$80 range.
Goldman Sachs Group Inc. sees current prices as a buying opportunity for investors, said Jeff Currie, global head of commodities at the bank. The bank forecasts solid inventory draws this summer as China’s rebound takes on steam, boosting investor sentiment.
- WTI for May delivery rose US$1.18 to US$75.55 a barrel in New York at 1 p.m.
- Brent for May settlement, which expires Friday, gained 49 cents to US$79.76 a barrel.
- The more-active June contract advanced US$1.12 to US$79.72.