In a analysis notice despatched to Rigzone late Tuesday by Natasha Kaneva, Head of World Commodities Technique at J.P. Morgan, analysts on the firm, together with Kaneva, stated “based mostly on quite a few current discussions with institutional and company purchasers”, they “conclude that the sentiment on oil is impartial to optimistic, significantly throughout the company neighborhood”.
“Many imagine we’re in a ‘peak Trump’ section, suggesting that the worst is behind us and we at the moment are getting into a interval of de-escalation,” the J.P. Morgan analysts acknowledged within the analysis notice.
“There’s a prevailing view that the tailwinds from commerce deal bulletins and the administration’s shift in focus from tariffs to taxes and deregulation will drive oil costs again into the mid-$70s following the current downturn,” they added.
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Within the notice, the analysts stated this angle is obvious in investor positioning and the time period construction of oil and oil merchandise.
“Cash managers elevated their net-long positions in Nymex WTI to the best stage since late January final week, whereas quick positions in Brent fell by probably the most since October,” they highlighted.
“Brent’s immediate unfold hit its strongest stage since January, and open curiosity on Brent climbed to a brand new document, with Brent September $95 calls buying and selling greater than 10,000 instances final Tuesday,” they added.
“Moreover, the Nymex gasoline crack settled at its highest stage for the reason that begin of the month, following an eight-week consecutive drop in U.S. stockpiles, and regardless of issues associated to demand, product cracks within the U.S. proceed to stay firmly in backwardation,” they went on to state.
The J.P. Morgan analysts famous within the publication that the current de-escalation in commerce talks has decreased the chance of a bear case however warned that “the ‘Trump put’ doesn’t lengthen to power, because the administration continues to prioritize decrease oil costs to handle inflation”.
“On the demand aspect, markets could also be underestimating the ultimate tariff ranges that the Trump administration plans to impose on U.S. imports,” the analysts stated within the notice.
Rigzone has contacted the White Home for touch upon the analysis notice despatched to Rigzone by Kaneva. On the time of writing, the White Home has not responded to Rigzone.
The J.P. Morgan analysis notice confirmed that the corporate is projecting that Brent crude oil will common $66 per barrel in 2025 and $58 per barrel in 2026. The corporate expects WTI crude oil to common $62 per barrel this 12 months and $53 per barrel subsequent 12 months, the notice outlined.
In keeping with the notice, J.P. Morgan sees Brent averaging $67 per barrel within the second quarter of this 12 months, $63 per barrel within the third quarter, $61 per barrel within the fourth quarter, $55 per barrel within the first quarter of subsequent 12 months, $57 per barrel throughout the second and third quarters of 2026, and $60 per barrel within the fourth quarter of subsequent 12 months.
J.P. Morgan expects the WTI worth to return in at $63 per barrel within the second quarter of 2025, $59 per barrel within the third quarter, $57 per barrel within the fourth quarter, $51 per barrel within the first quarter of 2026, $53 per barrel throughout the second and third quarters of subsequent 12 months, and $56 per barrel within the fourth quarter of 2026, the notice confirmed.
J.P. Morgan’s analysis notice highlighted that Brent averaged $82 per barrel and WTI averaged $76 per barrel in 2024. It identified that the previous averaged $81 per barrel in 2023 and the latter got here in at $76 per barrel once more in 2023.
On its website, J.P. Morgan describes itself as a number one world monetary providers agency with belongings of $3.9 trillion and operations worldwide. The corporate has “a legacy courting again to 1799”, its website factors out.
To contact the creator, e-mail andreas.exarheas@rigzone.com
