Brent oil prices are unlikely to breach the $100 a barrel level this year, barring any significant geopolitical drivers, with OPEC+ potentially adding supply and Russian flows recovering by mid-2023, J.P.Morgan analysts said in a note on Friday.
OPEC+, an alliance that includes members of the Organization of Petroleum Exporting Countries (OPEC) and others including Russia, is unlikely to defend the $80 price floor and hence would not need to cut production quotas this year, according to the note.
The group could instead add 400,000 barrels per day (bpd) to supply, it added. Saudi Energy Minister Prince Abdulaziz bin Salman said on Thursday the current OPEC+ deal to cut production targets by 2 million bpd would be locked in until the end of the year.
With Russian output expected to see a full recovery by June and higher price levels preventing the US from repurchasing to add to its strategic petroleum reserves, the supply-demand balance will likely tighten further, J.P.Morgan analysts said. Global benchmark Brent crude futures were trading around $84 per barrel on Friday, on track for a weekly decline on bets that tighter US monetary policy could crimp demand.
Brent oil may retest support of $84.03
J.P.Morgan also maintained its estimate for top importer China’s oil demand growth of 770,000 bpd. China is expected to import a record amount of crude in 2023 due to increased demand for fuel, mainly as people travel more following the dismantling of COVID-19 curbs, analysts said.
Comments
Comments are closed for this article.