Oil prices look to finish at a nearly 3-year high; Goldman Sachs lifts Brent year-end target to $90 a barrel

November Brent crude BRNX21, +1.90%, the global benchmark, was up $1.47, or 1.9%, at $79.56 a barrel on ICE Futures Europe. December Brent BRN00, +2.01% BRNZ21, +2.01%, the most actively traded contract, was up $1.48, or 1.9%, at $78.71 a barrel.

November West Texas Intermediate crude CL00, +2.00% CLX21, +2.00% rose $1.45, or 1.9%, to $75.43 a barrel on the New York Mercantile Exchange.

Both front-month WTI and Brent crude contracts were poised to settle at their highest levels since October 2018, FactSet data show.

Analysts at Goldman Sachs, led by Damien Courvalin, lifted their year-end forecast on Brent crude-oil to $90 a barrel from a previous forecast of $80, citing the aftereffects of the storm and rising demand, particularly in Asia. The analysts said Ida should prove to be the most bullish hurricane in U.S. history, canceling the ramp-up in OPEC+ output since July.

At the same time, global oil demand is back to converging to pre-COVID levels. Traffic congestion in China quickly recovered after a summer dip. The delta-driven decline in global flights was smaller than the analysts initially feared.

For almost all of this year so far, the crude market has been “biased towards undersupply,” said Robbie Fraser, global research and analytics manager at Schneider Electric, in a note. “There are concerns that supply could become even tighter as temperatures cool across the northern hemisphere.”

Fraser added that there’s a unique challenge this year in the form of record natural gas and liquid natural gas prices in Europe and East Asia. “That’s expected to make alternative options like diesel, fuel oils and propane much more attractive if buyers have some flexibility in heating options.”

Among the oil products traded on Nymex, October gasoline RBV21, +1.35% climbed by 1.2% to $2.215 a gallon and October heating oil HOV21, +1.47% rose 1.4% to $2.299 a gallon.

Natural-gas futures, meanwhile, rose more than 7%. “An upgraded probability of a second La Niña event this winter will keep gas buyers scouring markets for supplies,” said analysts at BCA Research.

October natural gas NGV21, +8.31%, which expires at the end of Tuesday’s session, climbed 7.8% to $5.542 per million British thermal units.