Brent Price To Rise to $90/bbl or Above By September: JP Morgan

JP Morgan forecasts Brent crude prices to continue to rally to $90/bbl or above by September, while prices are expected to ease back in the fourth quarter of this year and 2024, the bank said in a note.

• The bank forecasts prices to ease back towards mid 80s$/bbl in 4Q23 and 2024 as the market moves from a 3Q23 inventory draw into a slight surplus in the last quarter and next year.
• Global oil demand is forecast to grow by 1.7mbpd in 2023. Consumption rose by 1.8mbpd year on year in the first half of this year and is expected to slow to 1.5mbpd in the second half. Demand is expected to by 1.3mbpd quarter on quarter in Q3.
• Possible Australian LNG strikes could raise the risk of higher oil demand starting in September, with possible increases of 110-330kbpd.
• On the supply side, the bank sees record supply levels outside of OPEC+, particularly from the Americas.
• US liquids production is expected to rise to a new record and grow by 1.3mbpd in 2023 with 430kbpd of that in the second half of the year. US supply is forecast to end the year at 20.5mbpd.
• Iran’s oil production is estimated to rise to 3.1mbpd by the end of the year, up by 520kbpd from last year’s levels. Venezuelan production is forecast to rise to 850kbpd by year-end, up by 200kbpd year on year.
• Russian crude oil exports are expected to be in line with its pledged 500kbpd in August before rising back in September.
• JP Morgan expects Saudi Arabia to halve its pledged 1mbpd voluntary output cut by October.