Oil bulls pushed prices higher again on Tuesday, finding encouragement in signs of tightening supplies and fading worries over global economic growth.
The optimism has spread through investment banks, with many bumping up their price predictions for 2019, according to a Wall Street Journal poll.
West Texas Intermediate crude for May delivery CLK9, +1.85% on the New York Mercantile Exchange was up 84 cents, or 1.4%, at $62.43 a barrel. It closed Monday, the first day of the new quarter, at $61.59, the highest settlement since Nov. 7. The U.S. benchmark logged a 32.4% rise over the first three months of 2019, its strongest quarterly advance since the second quarter of 2009.
Read: Despite big first-quarter rally, stocks still lag other assets in making up lost ground
Richard Perry, analyst with Hantec Markets, sees some positive chart developments within WTI’s latest move higher. He notes that WTI has pulled well clear of previous resistance at $60.40, which puts $62.80 in grasp within the next week or so.
“The market does have a tendency to quickly consolidate breakouts rather than run out higher,” he said. “So this may begin to restrict immediate upside potential and could result in some stalling of the run higher. However, this would only be seen as a temporary situation and any unwinding move is a chance to buy.”
The global benchmark, June Brent crude LCOM9, +0.70% tacked on 28 cents, or 0.4%, to $69.29 a barrel on the ICE Europe exchange. Brent logged a roughly 25% rise in the first quarter, its strongest quarterly move since 2009.
Futures prices have climbed this year on signs of reduced global supplies after efforts by major oil producers to curb production. Members of OPEC and other major oil producers, including Russia, have pledged to curb crude production by around 1.2 million barrels a day from October levels for the first half of this year to prop up prices.
“The supply outlook remains top of mind of the oil market. Continued output curbs namely by Saudi Arabia set a bullish note, support prices and bring the much watched $70 per barrel within reach,” said Norbert Ruecker, head of economics at Julius Baer, in a note.
Bloomberg on Monday said its survey found output from the Organization of the Petroleum Exporting Countries fell for a fourth month in April, with Saudi Arabia continuing to curb output and Venezuelan production suffering as an economic and political crisis deepened. OPEC output fell by 295,000 barrels a day to 30.385 million, the survey found.
Against this production background, banks have raised their forecast for the price of Brent crude, the global benchmark, in 2019. Brent will average just over $68 a barrel this year, according to The Wall Street Journal’s query of 12 investment banks. That’s up from $67 when they were asked in February.
West Texas Intermediate, the U.S. oil standard, is expected to average nearly $60 a barrel, in line with the previous estimate, the poll showed.
The banks predicted prices will continue to rise through the April-June quarter, before falling back toward the end of 2019.
Among the products traded on Nymex, May gasoline RBK9, +1.63% rose 0.8% to $1.9146 a gallon, while May heating oil HOK9, +1.23% rose 1% to $2.0075 a gallon. May natural gas NGK19, -0.63% was off 1.1%% to $2.679 per million British thermal units.
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