Brent Forecast at 91$/bbl in Q4 but 100$/bbl Within Reach: RBC

Brent is forecast to average 91$/bbl and WTI at $86.50/bbl in 4Q although $100/bbl could be within reach according to a note from RBC. The physical oil market the healthiest in 12 months on OPEC+ cuts and Chinese demand.

• “The notion of $100/bbl has evolved from completely unimaginable a few short months ago, to within striking (or hyping) distance today.”
• Oil up at 100$/bbl is “far from a base-case scenario for us, but we have learned to respect that this oil market has evolved into as much of a momentum-based market as it is a fundamentally based one.”
• Their forecast for all quarters in 2024 remains below 100$/bbl.
• Demand is tracking markedly higher than many anticipated given previous concerns of a looming recession.
• Chinese oil data is stronger than macro headlines would suggest, and “physical tightness could be turbocharged if imports ramp further in the coming months.”