Upside risk to Oil prices rises as market tightens

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Brent Crude bottomed out at $72/bbl in June and then rose more than 28% over the following three months to break above $90/bbl. Economists at ANZ Bank

With OPEC’s production cuts firmly in place for the remainder of the year, we see the market moving into a deficit of 2mb/d in Q4. This tightness is likely to continue into Q1 2024 as production constraints remain in place and will keep Oil prices on an upward trajectory in Q4. We maintain our end of year price target of $100/bbl.

As it stands, spare capacity is ample. OPEC’s supply agreements have done their job and stabilised the market. However, the eventual unwinding of these over the next 6-12 months will ease the current supply tightness. As such, we don’t see much upside over our short-term target in 2024.Information on these pages contains forward-looking statements that involve risks and uncertainties.

 

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