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JP Morgan Cuts 2023 Brent Forecast To $81/bbl

OIL

JP Morgan has lowered its Brent crude oil forecast for 2023 to $81/bbl, from $90/bbl previously given a change in market fundamentals, the bank said in a note.

  • The bank forecasts global oil consumption to rise to 1.6mbpd, up by 300kbpd from previous estimates to a total of 101.4mbpd, a new record.
  • In comparison, OPEC forecasts global oil demand to reach 101.91mbpd this year and IEA estimated demand to rise to 102.3mbpd.
  • JP Morgan said record demand from China, India and the Middle East will offset contractions in the US and Europe and flat demand growth out of Korea and Japan.
  • On the supply side, the bank projects a supply surplus of 0.4mbpd in 2024, even with including OPEC+ voluntary supply cuts, given higher non-OPEC production.
  • Within the broader OPEC+ alliance, the bank forecasts production from Venezuela, Nigeria and Iran to be 600kbpd higher than previous projections from last November.
  • JP Morgan forecasts Russian output to average 10.7mbpd in 2023, flat on the year. Output is expected to rise to 10.9mbpd in 2024, as it believes Russia has no incentive to cut output as long as it can sell its oil.

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