Oil: Prices headed north – BBH

Analysts at BBH note that the Brent oil traded above $60 a barrel before the weekend, a level that has not been seen in a couple of years. 

Key Quotes

“US WTI reached an eight-month high near $54.  Saudi Arabia signalled its agreement to extend the output restraint beyond next March, and the supply disruption from Iraq-Kurds continues to pinch.  Strong global growth reports (PMIs) were also constructive.  Several large oil companies reported earnings.  Exxon and Chevron reported lower output than expected, while Total reported its best oil and gas earnings in a couple of years.”

“Market Impact:  WTI for December delivery closed strongly with a 4% gain on the week. It is especially impressive given the appreciating dollar.   It is the third weekly advance and a higher close for the eighth week of the past nine.  The pace of the move has left the technical indicators stretched, and near-term consolidation is likely.   However, the medium-term outlook looks constructive, and we target $58 in the coming weeks.”