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OIL: Commerzbank Revises Brent to $85/bbl and WTI to $80/bbl by Year End

OIL

Commerzbank revises the oil price forecast downwards on weak China demand with Brent at $85/bbl and WTI at $80/bbl by year end.

  • The significant price recovery on the oil market has run out of steam and is likely to tread water assuming the Middle East situation does not escalate further. 
  • Risk premium has probably partially priced out with no retaliatory strike by Iran so far.
  • Robust US gasoline demand is being offset by disappointing oil demand in China and slight downward revisions to IEA and OPEC global oil demand.
  • Oil demand in most industrialised countries should prove to be comparatively robust. 
  • Saudi Arabia and Russia are likely to postpone the planned gradual reduction in voluntary cuts.

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