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JP Morgan Slashes Oil Price Forecast To $81 This Year

JP Morgan has significantly reduced its forecast for Brent Crude prices for this year to $81 per barrel, down from $90 a barrel expected earlier, Forexlive reports.

As early as February this year, JP Morgan said that Brent Crude prices were not expected to reach $100 per barrel in 2023 unless a major geopolitical event rattles markets again.

Russian crude oil production is expected to recover by June, while high price levels would prevent the U.S. from repurchasing crude to refill the Strategic Petroleum Reserve (SPR), the Wall Street bank said at the end of February before the banking turmoil in the U.S. and the two surprise cuts from OPEC+ members announced in early April and early June.

JP Morgan’s latest cut in its Brent Crude forecast follows a cut by another major bank, Goldman Sachs, earlier this week.

Goldman Sachs has slashed its year-end oil price forecast to $86 per barrel for Brent, down from a previous projection of $95, as it sees higher supply from sanctioned oil exporters offsetting the recent OPEC+ and Saudi cuts amid potentially underwhelming demand. 

Goldman analysts have been bullish on oil in recent months, expecting tight markets in the second half of the year. Less than two weeks ago, the Wall Street bank said it expects a rally in oil and commodities, after the biggest-ever destocking in commodities that is currently underway. But even back then, Goldman’s analysts acknowledged their price calls had been wrong so far this year. 

“After an initial sharp 1.5 million barrels per day drop, Russian supply has nearly fully recovered despite the decision by many companies to stop buying Russian barrels,” Goldman’s analysts wrote in a June 11 note.

“The extra Saudi cut and our expectation that OPEC+ will extend half of its April voluntary cut in 2024 will likely only partly offset these bearish shocks.”


Early on Wednesday, Brent prices were trading at around $75 per barrel, slightly up on the day as the market awaits Fed’s rate decision and the weekly report on U.S. oil inventories.

By Charles Kennedy for Oilprice.com

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