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.
“This has caught the attention of the market place (and) is viewed as a situation that could potentially impact the flow of oil from the region as well as degrading the already declining relationship between Russia and the U.S.”
Brent is on track to rise more than 10 percent this week, close to its largest weekly increase since early 2009, after oil industry executives warned that this year’s fall below $50 would force higher-cost producers to reduce output.
Separately, minutes from the U.S. Federal Reserve’s Sept. 16-17 meeting, released on Thursday, showed the Fed’s policymaking committee was unsettled by signs of turmoil abroad but did not think this had “materially altered” the outlook for the U.S. economy.
“The Fed minutes had them worrying about inflation even though they still think they can raise rates this year and there are geopolitical concerns, but I think there is a focus on production destruction in the United States and that is also helping lift prices,” said Phil Flynn, analyst at Price Futures Group in Chicago.
Addtional reporting by Robert Gibbons in New York, Amanda Cooper in London, Aaron Sheldrick in Tokyo; Editing by David Gregorio