With oil prices now within touching distance from their prewar levels and traffic through the Strait of Hormuz beginning to normalize, more analysts are cutting their forecasts, though some are more bullish on the outlook for the oil market than others:
JPMorgan now sees Brent crude, the international oil benchmark, averaging $80 a barrel in the fourth quarter and around $64 a barrel next year. Brent was last around that level in January, when the dominant narrative in the global oil market was that of oversupply. In a note today, JPMorgan analysts cited lower-than-expected drawdowns of oil stocks from OECD countries and weaker global demand.
Wood Mackenzie also cut its estimates this week, though they're significantly higher than JPMorgan's: The energy research and consulting firm sees Brent easing to $78 a barrel in 2027, assuming traffic in Hormuz fully normalizes in August.
"The supply shock removed more than 11 million barrels per day of crude from global markets," the firm wrote in a note. It estimated that 70% of curtailed production could return within three months of the Strait reopening, and 90% within six months. The final chunk will take longer.
Here's what other banks and research firms are saying on the outlook for oil:
-- Capital Economics sees Brent crude ending the year at $75 a barrel and falling to $60 a barrel by the end of next year. Energy flows from the Middle East will pick up during the upcoming quarter and lead to a "small global oil market surplus" in the fourth quarter this year, its economists said in a note this week.
-- Goldman Sachs expects Brent crude to average $85 a barrel this year.
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