U.S. crude oil fell nearly 1% on Tuesday, one day after posting the worst daily loss in two years.
Energy traders were relieved Monday after Israel’s long-anticipated retaliatory strikes on Iran last Friday spared the Islamic Republic’s oil and nuclear facilities. The benchmark U.S. crude oil contract sold off more than 6%, or $4.40, to $67.38 per barrel.
But oil prices are too cheap in the near term compared with fundamentals, Goldman Sachs analyst Daan Struyven told CNBC’s “Squawk Box” on Tuesday, citing demand from refilling the U.S. Strategic Petroleum Reserve as well as from the airline industry, Struyven said.
Here are Tuesday’s energy prices:
- West Texas Intermediate December contract: $66.77 per barrel, down 61 cents, or 0.91%. Year to date, U.S. crude oil is down nearly 7%.
- Brent December contract: $70.77 per barrel, down 65 cents, or 0.91%. Year to date, the global benchmark has fallen about 8%.
- RBOB Gasoline November contract: $1.9363 per gallon, down 1.53%. Year to date, gasoline has pulled back nearly 8%.
- Natural Gas November contract: $2.245 per thousand cubic feet, down 2.77%. Year to date, gas has lost more than 10%.
Goldman Sachs expects the price of Brent to recover to $77 per barrel in the fourth quarter even without any oil supply disruptions in the Middle East.
The risks, however, are skewed to the downside in 2025, Struyven said. Demand is soft in China, U.S. production is robust and OPEC+ has plans to bring crude back to the market in December.
