by Adam Clark

Oil prices rallied on Friday after experiencing a slump to their lowest level in four months. However, concerns about weakening demand continued to exert pressure on the market. Crude oil was on course for its fourth consecutive week of declines.

Brent Crude and West Texas Intermediate Show Modest Gains

In early trading, Brent crude, the international standard, rose by 0.7% to reach $77.98 per barrel. Likewise, West Texas Intermediate, the U.S. benchmark, increased by 0.8% to $73.47 per barrel.

U.S. Industrial Production Decline Weighs on Oil Futures

Oil futures settled at their lowest point since early July following the release of a report indicating a decline in U.S. industrial production throughout October. Consequently, prices approached a pattern known as contango, suggesting a well-supplied market where spot prices and near-term futures are worth less than futures expiring several months later.

According to Ole Hanse, the head of commodity strategy at Saxo Bank, the weakening demand outlook prompted a significant sell-off from speculators who found themselves in a vulnerable position. Hanse explained that speculators had taken on a substantial long position alongside the smallest gross short position in 12 years.

Possibility of Short-Term Decline, but Forecasts Suggest a Rebound in 2024

While the recent drop in oil prices may seem concerning, most forecasts predict that it will be short-lived. Experts anticipate a rebound in 2024 due to increased demand and potential supply cuts.

Chevron Receives Upgrade from Gerdes Energy Research

In related news, analysts at Gerdes Energy Research upgraded Chevron (CVX) to a Buy rating from Neutral. They maintained their price target of $171 and estimated that with oil prices assumed to be between $70 and $75 per barrel from 2024 to 2028, the company will generate approximately $137 billion in free cash flow over that period. This amount is equivalent to 43% of Chevron's market capitalization.

Note: Chevron shares were up 0.2% at $142.04 in premarket trading. Chevron was previously highlighted as a stock pick earlier this month.

A Collection of 21st-Century Art by Native American Artists

Investors Optimistic as Money Continues to Flow Into Stocks

Leave A Reply

Your email address will not be published. Required fields are marked *

Related posts

Barclays Delays Prediction for Fed Rate Hike to January
News

Barclays Delays Prediction for Fed Rate Hike to January

Barclays economists have revised their forecast for a Federal Reserve rate hike to January based on disappointing job nu...

Egdon Resources Forms Joint Venture for Gas Appraisal and Development
News

Egdon Resources Forms Joint Venture for Gas Appraisal and Development

Egdon Resources forms a joint venture with Cuadrilla and York Energy to appraise and develop gas licenses in northern En...

The Rise and Fall of Small-Caps in the Stock Market
News

The Rise and Fall of Small-Caps in the Stock Market

Despite recent declines in the stock market, small-cap stocks have the potential for a resurgence. This article explains...

Washington Trust to Pay $9 Million to Settle Discrimination Allegations
News

Washington Trust to Pay $9 Million to Settle Discrimination Allegations

Washington Trust, the oldest community bank in the US, will pay $9 million to settle allegations of lending discriminati...