J.P. Morgan sees Brent crude prices averaging $76/bbl in Q3’21 and $80/bbl in Q4’21 – a $2 and $6 upgrade to its previous forecasts, respectively.
“We… believe that from here and through Labour Day, the direction of travel for demand is still likely a fair bit higher,” the bank says in a note.
Brent was trading up 24 cents, or 0.3%, at $75.80/bbl.
JPM now sees global oil demand increasing from an average of around 97.7 mln barrels per day (bpd) in June to 99.7 mln bpd in August, averaging 99.1 million bpd in Q3’21, driven by a rise in estimates for Chinese naphtha and LPG.
The bank expects global oil demand to cross 100 mln bpd in December, averaging at 99.6 mln bpd in Q4’21.
Bank downgrades 2021 supply forecast by 300,000 bpd vs previous forecast.
JPM pencils in a 500,000 bpd production increase from OPEC+ for August, but says some members may push for a higher increase as major consumers like China and India voice concerns about elevated prices.
Bank says regardless whether OPEC+ choose to add 500,000 bpd increments over the next couple of months or 1 mln bpd in August, followed by a 500,000 bpd booster in September, the impact on the price trajectory will be largely identical; sees price rally as deficit driven.