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Oil Rises as Output in StormHit U.S. Begins Slow Return

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Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder that the supply situation was tight, just as demand recovers from the depths of the COVID19 pandemic.

Brent crude was up 55 cents, or 0.9, at 63.46 a barrel by 0742 GMT, after gaining nearly 1 last week. U.S. oil rose 47 cents, or 0.8, to 59.71 a barrel, having fallen 0.4 last week.

Prices also received a boost after investment bank Goldman Sachs raised Brent its price forecast by 10, with expectations for it to reach 70 by the second quarter and 75 in the third quarter.

We now forecast that oil prices will rally sooner and higher, driven by lower expected inventories and higher marginal costs at least in the short run to restart upstream activity, Goldman analysts wrote.

Better than expected demand and still depressed supply once again creating a larger deficit than even we expected, they said.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day bpd of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Oilfield crews will probably take several days to deice valves, restart systems and begin oil and gas output. U.S. Gulf Coast refiners are assessing damage and may take up to three weeks to restore most of their operations, analysts said, though hampered by low water pressure, gas and power losses.

With threequarters of fracking crews standing down, the…

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