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James Hyerczyk
WTI and Brent Crude Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading higher on Tuesday but off their best levels amid the optimistic tone set by the COVID-19 vaccine rollouts and a slower recovery from the deep freeze in Texas that shut down production last week.

At 12:21 GMT, April WTI crude oil is at $62.07, up $0.37 or +0.60% and May Brent crude oil is at $64.71, up $0.35 or +0.54%.

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Slow Restart in Texas

Reuters is reporting that sources said shales oil producers in the southern United States could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output that shut down because of cold weather, as frozen pipes and power supply interruptions slow their recovery.

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New Price Forecasts

Goldman Sachs Commodities Research raised its Brent crude oil price forecasts by $10 for the second and third quarters of 2021, citing lower expected inventories, higher marginal costs to restart upstream activity and speculative inflows.

The Wall Street bank expects Brent prices to reach $70 per barrel in the second quarter from the $60 it predicted previously and $75 in the third quarter from $65 earlier.

Additionally, Morgan Stanley expects Brent crude prices to climb to $70 per barrel in the third quarter on “signs of a much improved market” including prospects of a pick-up in demand.

Russia, Saudi Arabia at Odds over Output Deal Ahead of OPEC+ Meeting:  RIA Cites Source

Saudi Arabia and Russia have differences over a potential deal among OPEC+ oil producers that could ease curbs on supply starting in April, a source told RIA news agency on Monday ahead of a meeting of the group next week.

The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, are likely to ease curbs on supply after April given a recovery in prices, according to sources.

“There was some concern from Riyadh based on the fact that its position on the fate of the deal did not match Moscow’s,” the source told RIA. “The Saudis will insist on maintaining production at the current level and will call for a cautious approach at the upcoming meeting.”

The source did not elaborate on the Russian position.

Russian Deputy Prime Minister Alexander Novak has voiced support for a gradual increase in oil output amid improving demand and as COVID-19 vaccines are being rolled out.

Daily Forecast

The weather is expected to begin cooperating in Texas with temperatures nearing 80 degrees in some cities. This could help speed up the recovery from last week’s Arctic freeze. This may allow the refineries to ramp up production faster than originally expected.

OPEC+ is scheduled to meet to set policy on March 4. The two key questions for the group will be whether Saudi Arabia rolls back is voluntary but of 1 million barrels per day (bpd) – which is due to end next month – and whether there is room for an additional increase in supply from the whole group.

The American Petroleum Institute (API) will release its weekly inventories report at 21:30 GMT. It is expected to show stockpiles of U.S. crude oil and refined products likely declined last week, a preliminary Reuters poll showed on Monday, due to the disruption in Texas.

For a look at all of today’s economic events, check out our economic calendar.
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