Oil Rebounds, Gaining 6.6% YTD as Investors Eye Fed Meeting and OPEC Reports

Published 11/06/2024, 06:16
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Oil prices rebounded on Monday, with WTI and Brent crude futures posting gains amid rising summer fuel demand and shifting market sentiments.

Oil prices rebounded on Monday, with West Texas Intermediate (WTI) and Brent crude futures both posting gains amid rising summer fuel demand and shifting market sentiments.

As of 10:51 a.m. EDT, the WTI July contract was trading at $76.38 per barrel, up 85 cents or 1.1%, while the Brent August contract rose 81 cents or 1% to $80.44 per barrel. Despite last week’s losses following OPEC+’s decision to increase production, oil prices have seen year-to-date gains of 6.6% and 4.4% for WTI and Brent, respectively.

Oil Prices Rebound

In addition to the gains in crude oil futures, RBOB Gasoline and Natural Gas contracts also experienced significant upward momentum. The RBOB Gasoline July contract traded at $2.39 per gallon, up 0.67%, with a year-to-date gain of 14%.

Meanwhile, the Natural Gas July contract surged 5.96% to $3.09 per thousand cubic feet, bringing its year-to-date gain to 22.6%.

Why Oil Prices Are Up Today

Goldman Sachs analysts have projected that Brent crude prices will rise to $86 per barrel in the third quarter, driven by increased summer transportation and cooling demand.

They expect the market to face a supply deficit of 1.3 million barrels per day (bpd). The investment bank has set a $75 floor for Brent, citing lower prices promoting demand, and a $90 ceiling due to higher-than-expected inventories and the OPEC+ production decision.

UBS analysts have observed that long positions in oil have been at their lowest level since 2011, while short positions have been near record highs. The bank considers this market positioning overly pessimistic and anticipates inventories to start falling, with demand increasing by 2-2.5 million bpd through August.

Investors should be closely monitoring several key events this week, including the upcoming Federal Reserve meeting, inflation data, and oil market reports from OPEC and the International Energy Agency (IEA).

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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

This article was originally published on The Tokenist. Check out The Tokenist’s free newsletter, Five Minute Finance, for weekly analysis of the biggest trends in finance and technology.

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