Crude oil futures settled higher on Tuesday as market participants continued to expect that ongoing strong OPEC compliance with the production-cut deal will continue to support oil prices.
On the New York Mercantile Exchange crude futures for January delivery fell 1.4% to settle at $58.11 a barrel, while on London\'s Intercontinental Exchange, Brent gained 0.65% to trade at $63.88 a barrel.
OPEC oil output fell in November by 300,000 barrels per day (bpd) to its lowest since May, a Reuters survey found on Monday, amid the oil cartel’s strong compliance with the production-cut deal.
Expectations for ongoing strong OPEC compliance stoked investor hopes that rebalancing in oil markets would continue through 2018 as Goldman Sachs (NYSE:GS) raised its 2018 forecasts for both Brent and Crude.
Goldman Sachs raised its 2018 forecasts on Brent and Crude Forecasts to $62 per barrel, and $57.50 a barrel, respectively. That is an increase from its previous 2018 Brent forecast of $58 per barrel and WTI forecast of $55 per barrel.
“While the deal leaves room for an earlier exit than currently scheduled, we now reflect this resolve in our supply forecast, with full compliance for longer and a more modest exit rate,” Goldman Sachs analysts said in a note.
The upbeat session for crude futures comes ahead of the inventory data from the American Petroleum Institute on Tuesday as well as a further report from EIA on Wednesday expected to show a decrease in domestic crude inventories for the second-straight week.
U.S. crude production, meanwhile, is likely to be closely monitored amid fears that U.S. producers are set to ramp up output.
U.S. output rose in September to 9.5 million barrels per day (bpd), the highest monthly output since 2015, the EIA said last week.
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