The United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, and the United States Brent Oil Fund (NYSEArca: BNO), which tracks Brent crude oil futures, have been affected by the global equity sell-off, each falling more than 2.5% over the past week, but some major banks are increasingly bullish on crude.
Supporting the crude oil markets, the expanding global economy has increased demand for commodities and drawn down oil inventories. For instance, according to the Energy Information Administration, U.S. crude stockpiles have declined for the past 10 consecutive weeks and are now at their lowest level since 2015.
“Goldman Sachs was the latest to give up its skepticism and predict that Brent would reach $80 a barrel within six months. A couple of days earlier, JP Morgan had said that it expected the international benchmark to hit $78 in a few months,” reports OilPrice.com.
But wait. There’s more.
“In mid-January, BofA upped its price forecast on Brent to $64 a barrel, which now doesn’t look bullish enough, compared with what Goldman and JP Morgan expect. Morgan Stanley falls in the middle, predicting that Brent will occasionally touch $70–75 in the first half of this year, stabilizing around $75 a barrel in the third quarter,” according to OilPrice.com.