Brent Crude Fair Value Increased to 95$/bbl: Bloomberg Intelligence

The fair value of Brent has been increased to about 95$/bbl according to the Bloomberg Intelligence proprietary model from 90$/bbl on Sept 8.

• The increase is driven by higher geopolitical risk premiums from the Israel-Hamas war while the market remains tight in 4Q due to constrained OPEC+ supply.
• The three Bloomberg scenarios see prices from 90$/bbl to 105$/bbl despite persistent concerns about a global economic slowdown and a stuttering recovery in China.
• The model suggests inflation expectations and refining margins are also key drivers of the crude price.
• Price volatility may remain elevated while stimulus plans in China and a substantial drawdown of inventories could also be supportive.
• Beyond the short term suggests strong fundamentals from years of underinvestment in new production and concerns about real OPEC+ spare capacity.