Crude Oil Hits October High After EIA Inventories Deficit

Crude oil has leveled off in Thursday trade, after posting sharp gains on Wednesday. In the North American session, U.S. West Texas Intermediate crude oil futures are trading at $55.84, up $0.03, or 0.06% on the day. Brent crude futures are trading at $61.13, up $0.08 or 0.13%.

Brent Pushes Above $60

Brent oil closed above the symbolic $60 level on Wednesday. Brent closed the day at $61.28, its highest level since the end of September. However, according to analysts at Goldman Sachs, investors shouldn’t expect much more in gains from crude. The company said that it expected Brent crude prices to remain around the $60 level in 2020, barring any “meaningful” energy shocks. The report said that Brent futures were caught between “worsening growth expectations and rising Middle East tensions”. Notably, Goldman Sachs has lowered its demand for crude in 2019 and 2020. The forecast for 2019 was lowered to 950 thousand barrels per day, down from an earlier forecast of 1.25 million. The forecast for 2020 has been lowered to 1.25 million, down from 1.45 million. With oil supplies continuing to outpace demand, OPEC members will feel pressure to reduce demand in order to boost prices. Kuwait, which is OPEC’s four-largest producer, said that it is considering cuts to its oil production target. Other OPEC members are also feeling the pinch of low oil prices and will want to see lower production targets.