Oil futures: Brent slips below $75/b mark but bullish forecasts grow

London (Quantum Commodity Intelligence) – Brent crude futures slipped lower in London afternoon trading Tuesday, after earlier breaking the $75/b mark for the first time since April 2019, as the oil price rally resumed after stalling in the latter part of the previous week.

Front-month August Brent futures were trading at $74.95/barrel (1419 GMT), compared to Monday's settle of $74.90/b.

At the same time, July WTI was trading $73.82/b, up from Monday's settle of $73.66/b.

The weaker dollar performance was cited for higher crude prices, as well as an uptick in investor length on Brent and distillate futures, and analysts have become increasingly bullish in forecasts.

"Oil futures rallied strongly as the weaker USD boosted its appeal among investors. Rising expectations of further declines in inventories also boosted sentiment," said Daniel Hynes, senior commodity strategist at ANZ in a note Tuesday.

"The surge in the oil price coincided with the brightening of sentiment on the stock market, which points to speculative support...Besides the positive investor sentiment, the good physical demand as transport activity recovers around the world should not go unmentioned, either," said Commerzbank Head of Commodity Research Eugen Wienberg.

Bank of America said Monday that oil prices could hit $100/b in 2022 as surging demand and tight supplies tip the supply/demand balance in favor of a bullish outlook.

The US bank said consumption will outstrip tight supplies as the economic recovery lifts demand, particularly in the form of pent-up travel demand and a preference for private vehicles over public transport.

Last week, Goldman Sachs' head of commodity research, Jeff Currie, told a virtual conference the investment bank sees a 10% probability of $100/b Brent by the end of 2021, although $80/b remains its base scenario.

Meanwhile, Amrita Sen, Director of Research at Energy Aspects told Bloomberg TV that "fundamentally the crude market hasn't been this tight for a very long time."