Oil surges near $67 a barrel as traders say price could top $80

Brent Oil jumped towards $67 a barrel Tuesday with investment banks and traders predicting the market will tighten further and push prices higher.

Futures in New York jumped 1.6% on Tuesday after climbing more than 4% in the previous session.

The market is heading toward what could be the tightest quarter since at least 2000, according to Morgan Stanley, while Socar Trading SA sees global benchmark Brent hitting $80 this year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

Brent for April settlement added 1.8% to $66.40 on the ICE Futures Europe exchange are climbing 3.7% in the previous session

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Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply.

Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The positive momentum continues in the oil complex, with investors unabashedly predisposed to a bullish view,” said Stephen Innes, global chief global market strategist at Axi. “There is far more optimism than fear.”