Crude oil prices pushed past $120/bbl to their highest levels in three months on Monday after Saudi Arabia raised the official selling price of its Arab light crude to Asia, but eased lower by the close of trading.
“Energy traders are confident this oil market will remain tight given the short-term supply outlooks from both OPEC+ and the U.S., but… exhaustion could be setting in,” according to Oanda’s Ed Moya, as oil has rallied more than 50% YTD.
July natural gas (NG1:COM) ended +9.4% at $9.322/MMBtu, the highest close for a front-month contract since August 2008.
Energy stocks (NYSEARCA:XLE) broadly closed about even, but at least eight individual names – (NYSE:COP), (EOG), (MPC), (VLO), (CIVI), (WLL), (OAS) and (MTDR) – touched all-time highs during the day, and Core Labs (NYSE:CLB) tallied its 10th straight positive session for its longest winning streak in 12 years.
Citi and Barclays raised their oil price forecasts for 2022 and 2023, saying they expected Russian production and exports to fall by 1M-1.5 M bbl/day by year-end 2022.
Citing tighter market balances, Citi raised its Q2 Brent price forecast by $14 to $113/bbl, Q3 and Q4 prices by $12 to $99/bbl and $85/bbl respectively, and FY 2023 prices to average $75/bbl, $16 higher than the bank’s prior guidance.
Citi now sees Iran sanctions relief beginning in next year’s Q1, at first adding 500K bbl/day before rising to 1.3M bbl/day over the second half; it previously expected Iran sanctions relief to add supply in mid-2022.
Last week, energy stocks followed crude oil prices higher after markets shrugged off OPEC’s modest production boost.