Home » Business » JPMorgan Expects Oil Super Cycle: Oil Price May Rise To $ 190 | 06/26/20

JPMorgan Expects Oil Super Cycle: Oil Price May Rise To $ 190 | 06/26/20

The corona pandemic has given the oil markets a damper. After the historic slump in oil prices in March there were recovery movements, but the pre-crisis levels remain far away. Still, an analyst believes.

• Oil prices removed from pre-crisis levels despite recovery
• Analyst calculates a super cycle oil

• $ 190 per barrel possible

Weak demand is currently one of the biggest problems on the oil market. The corona crisis – coupled with shutdowns and a massive return on investment – had historically caused oil prices to plummet in March and caused the oil producing countries to massively reduce production.

Since then, the situation on the oil market has eased somewhat, oil prices have left their historic lows behind and initiated a recovery course. Still, at around $ 40, the highs remain far away. Against this background, many analysts have shown caution in their forecasts and at least critically assessed the interim oil price rally.

JPMorgan remains bullish

However, the experts at the US bank JPMorgan are not impressed by the persistently difficult market conditions and cautious assessments by other analysts and on the contrary are extremely bullish when it comes to assessing the development of oil prices.

Even before the historic drop in oil prices in March, Christyan Malek, head of oil and gas research in Europe, the Middle East, and Africa at JPMorgan, had spent $ 190 on crude oil. Given the interim slump in oil prices, this forecast appears to be very ambitious, but the expert recently emphasized: “The reality is that the chances of oil heading towards $ 100 at this point are higher than three months ago.”

Does the pendulum change?

Malek refers to the cyclical nature of the oil industry. He calls this the “oil super cycle” and explains that the strong oversupply on the oil market, ie the stocks that are too full, have led to a production cut. Now the pendulum could swing in the opposite direction. In a report, he said that the oversupply oil markets would experience a “basic supply deficit” by 2022. The most likely scenario, according to JPMorgan, is that Brent rises to $ 60 a barrel to incentivize higher production.

Even if Malek failed to meet a price target for the bull case, the expert was optimistic about CNN Business that the $ 190 prospect announced in March could still be achieved.

“The deficit speaks for itself. This means that oil prices will go through the roof,” he said. “Do we think it’s sustainable? No. But could it reach that level? Yes.”

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