Oil prices rose on Tuesday, underpinned by the likely easing of Covid-19 lockdowns around the world, positive economic forecasts and lower output as US supplies were slow to return after a deep freeze in Texas shut down crude production.
Brent crude was up $0.36, or 0.5%, at $65.60 a barrel by 1212 GMT and US crude rose $0.39, or 0.6%, to $62.09 a barrel. Both contracts rose more than $1 earlier in the session.
“Vaccine news is helping oil, as the likely removal of mobility restrictions over the coming months on the back of vaccine rollouts should further boost the oil demand and price recovery,” said UBS oil analyst Giovanni Staunovo.
Commerzbank analyst Eugen Weinberg said optimistic oil price forecasts issued by leading US brokers also contributed to the latest upswing in prices.
Goldman Sachs expects Brent prices to reach $70 per barrel in the second quarter from $60 it predicted previously, and $75 in the third quarter from the earlier $65 forecast.
Morgan Stanley expects Brent crude to climb to $70 in the third quarter.
“New Covid-19 cases are falling fast globally, mobility statistics are bottoming out and are starting to improve, and in non-OECD countries, refineries are already running as hard as before Covid-19,” Morgan Stanley said in a note.
Bank of America said Brent prices could temporarily spike to $70 per barrel in the second quarter.
Disruptions in Texas caused by last week’s winter storm also supported oil prices. Some US shale producers forecast lower oil output in the first quarter.
Stockpiles of US crude oil and refined products likely declined last week, a preliminary Reuters’ poll showed on Monday.
A weaker dollar also provided some support to oil as crude prices tend to move inversely to the US currency.