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UPDATE 9-Oil settles mixed amid post-storm uncertainty

CommoditiesFeb 23, 2021 21:42
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© Reuters.

* Brent could hit $70-75 a barrel in third quarter, say
banks
* Houston ship channel traffic slowly returning to normal
* U.S. crude, refined product stocks likely fell last week
* Coming up: U.S. API inventory data at 2130 GMT

(Updates with settlement prices, adds commentary)
By Laura Sanicola
NEW YORK, Feb 23 (Reuters) - Oil prices settled near
year-long highs on Tuesday on signs that global coronavirus
restrictions were being eased, although concerns about the pace
of a U.S. economic recovery and the return of Texas oil
production kept gains in check.
U.S. crude CLc1 settled down 3 cents to $61.67 a barrel,
still close to its highest levels since January 2020. Brent
crude LCOc1 settled up 13 cents, or 0.2%, to $65.37 a barrel.
Both contracts rose more than $1 earlier before retreating.
Shale oil producers and refiners in the southern United
States are slowly resuming production after 2 million barrels
per day (bpd) of crude output and nearly 20% of U.S. refining
capacity shut down because of last week's winter storm.
Traffic at the Houston ship channel was slowly returning to
normal. Production, however, was not expected to fully restart
soon and some shale producers forecast lower oil output in the
first quarter. Some oil production may never come back, commodities
merchant Trafigura said on Tuesday. After the cold snap, U.S. crude oil stockpiles were also
seen falling for a fifth straight week, while the inventories of
refined products also declined last week, an extended Reuters
poll showed. EIA/S
"It appears that last week's severe cold spell and related
Texas power outage could be affecting the weekly EIA data into
the middle of next month," said Jim Ritterbusch, president of
Ritterbusch and Associates in Galena, Illinois.
There were also concerns over the U.S. economic recovery,
which the chair of the Federal Reserve, Jerome Powell, said
remained "uneven and far from complete."
He said it would be "some time" before the central bank
considered changing policies it had adopted to help the country
back to full employment. Commerzbank analyst Eugen Weinberg said the recent oil price
rise was buoyed by upbeat price forecasts from U.S. brokers.
Goldman Sachs 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 forecast earlier. Morgan Stanley, which expects Brent to reach $70 in the
third quarter, said new COVID-19 cases were falling while
"mobility statistics are bottoming out and are starting to
improve".
Bank of America said Brent prices could temporarily spike to
$70 in the second quarter.

UPDATE 9-Oil settles mixed amid post-storm uncertainty
 

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