Oil surges to settle at three-month high on bullish outlook

Thu Oct 8, 2015 3:16pm EDT
 
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By Koustav Samanta and Scott DiSavino

NEW YORK (Reuters) - Oil prices climbed to their highest in three months on Thursday after a closely watched oil forecaster predicted prices would climb to $75 over the next two years, adding to early gains notched after a rally in Chinese stocks worries about Syria.

PIRA Energy Group, a closely watched forecaster that predicted the collapse in oil prices a year ago, said it sees crude prices at $70 per barrel by the end of 2016 and $75 a barrel in 2017.

Brent crude oil futures LCOc1 closed up $1.72 at $53.05 a barrel, while U.S. crude futures CLc1 closed up $1.62 at $49.43 a barrel.

Earlier, crude prices climbed on buoyant Chinese equity markets and as Russia's military involvement in Syria brought a geopolitical risk premium into the market.

Chinese stock markets rose 3 percent after a week-long holiday, the biggest rise in two trading weeks.

"Sentiment regarding China appears to have shifted of late and we feel that further stability in the Chinese stock market will limit downside price follow-through across the energy complex," said Jim Ritterbusch, president of Galena, Illinois-based Ritterbusch & Associates.

Syrian troops and allied militia backed by Russian air strikes and cruise missiles attacked rebel forces.

"The situation is getting complicated very quickly and raising the geopolitical risk in the region to a new high," Energy Management Institute analyst Dominick Chirichella said about the conflict in Syria.   Continued...

 
A man fills up his car at a petrol station in Rome January 6, 2015. REUTERS/Max Rossi/Files