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Goldman Sachs analysts expect Brent to rise to $86 a barrel in
third quarter, saying in a report that solid summer transport
demand will push the oil market into a third-quarter deficit of
1.3 million barrels per day (bpd).
Brent crude futures gained 16 cents, or 0.2%, to $79.78 a barrel
by 0950 GMT. U.S. West Texas Intermediate crude futures were up
6 cents at $75.59.
"We believe current market positioning is overly pessimistic,
considering that we expect larger oil inventory declines over
the next few weeks," UBS analysts said in a report.
Oil last week posted a third straight weekly loss on concerns
that a plan to unwind some production cuts by the Organization
of the Petroleum Exporting Countries (OPEC) and its allies,
known collectively as OPEC+, from October will add to rising
supply.
Despite the OPEC+ cuts, oil inventories have risen. U.S. crude
stocks rose in the latest week, as did gasoline stocks. Energy
consultancy FGE also expects oil to rally, with prices reaching
the mid-$80s into the third quarter.
"We continue to expect the market to firm up," FGE said. "But it
will likely need a convincing signal of tightening from
preliminary inventory data."
A strong dollar weighed on the market, with the currency
rallying after Friday's U.S. jobs data prompted investors to
trim expectations for interest rates. [USD/]
The euro, meanwhile, fell after French President Emmanuel Macron
called a snap parliamentary election.
A stronger U.S. currency makes dollar-denominated commodities
such as oil more expensive for holders of other currencies.
(Reporting by Alex LawlerAdditional reporting by Florence
TanEditing by David Goodman)
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