Oil jumps near $63 with tightening market boosting outlook

Oil jumps near $63 with tightening market boosting outlook

Oil surged toward $63 a barrel with investment banks and traders predicting the market will tighten further and push prices higher.

Futures in New York jumped 1.7 percent on Tuesday after climbing more than 4 percent in the previous session. The market is heading toward what could be the tightest quarter since at least 2000, according to Morgan Stanley, while Socar Trading SA sees global benchmark Brent hitting $80 this year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. will also help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Fuel flows from Asia to the U.S. have gained after the cold blast left some of the biggest refineries facing a slow and messy restart.

Consumption will get back to pre-virus levels by late July, while output from major producers is likely to remain "highly inelastic" to the rising prices, the bank said in a note

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and