By Samuel Indyk
Investing.com – The FTSE 350 Oil & Gas sub-index rallied over three percent on Monday as oil prices increased for a fifth consecutive trading session.
Brent Oil Futures rose over 1% towards $80/barrel and WTI was trading above $75/barrel for the first time since 14th July as tight supplies and the outlook for improving demand continues to support prices.
Goldman Sachs upgrades forecast
A note from Goldman Sachs (NYSE:GS) is also getting attention with the US investment bank raising their year-end forecast for Brent by $10 to $90/barrel.
“Brent oil prices have reached new highs since October 2018, and we forecast that this rally will continue, with our year-end Brent forecast of $90/barrel vs. $80/barrel previously,” Goldman analysts said in a research note.
“While we have long held a bullish oil view, the current global oil supply-demand deficit is larger than we expected, with the recovery in global demand from the Delta impact even faster than our above consensus forecast and with global supply remaining short of our below consensus forecasts.”
Oil companies
The higher oil prices have helped oil companies head towards the top of the FTSE 100 with BP (LON:BP) and Royal Dutch Shell (LON:RDSa) up 2.9% and 3.5%, respectively.
In the midcap FTSE 250 index, Cairn Energy (LON:CNE) and Tullow Oil (LON:TLW) are also trading higher, while the troubled oil company Petrofac (LON:PFC) is rallying for a second day after the company entered into a plea agreement with the UK Serious Fraud Office (SFO).
Shares are trading higher by over 23% on Monday morning, after a 27% jump on Friday following the news.
Petrofac said it would plead guilty to seven separate offences of failing to prevent bribery between 2011 and 2017. The SFO probe has been ongoing for four years.
Any fine will now be decided by the court with some analysts expecting a fine around £300 million.
The settlement of the probes may also open territories for Petrofac to win contracts, after some countries suspended Petrofac from competing for work while the probe was ongoing.
Petrofac will be hoping that Abu Dhabi, Saudi Arabia, and Iraq will now relax the suspensions on the company for competing for contracts.