Brent Could Rise Towards 100$/bbl on Russia Output Cuts: JPMorgan

JPMorgan maintains a baseline view for Brent prices to reach $90/bbl by May, and $85/bbl in H2 2024 but has the potential to rally to $100/bbl this year.

• The upside risk from Russia’s recent decision to cut production would raise prices if it isn’t balanced out by other counter-measures.
• Russia’s “actions could push Brent oil price to $90 already in April, reach mid-$90 by May and close to $100 by September,” analysts said in a March 27 note

• An even-odds possibility of an OPEC+ production cuts extensions to the year-end could boost prices further.
• Russia could however end up maintaining oil exports at current levels despite the reduced output.
• US gasoline prices are likely to rise to the highest since the summer of 2022 to $4/gal by May.
• The US could release as much as 60mbbls of crude from the SPR. “Although diminished, the reserve still holds ample crude to protect the nation’s strategic needs and offer a cushion against price shocks.”
• US dollar strength and high borrowing costs can cause severe disruptions to global consumption which could also restrain prices.