J.P. Morgan Global Commodities Research says Brent oil to average $84 per barrel (bbl) in Q3, and hit another $90/bbl by August/September, underpinning expectations that global demand will outpace supply in the summer quarter:
• Forecasts global oil liquids deficit of 1 million barrels per day (bpd)in Q3, 1.8 million bpd surplus in products during the summer quarter, but a massive 2.6 million bpd deficit in crude
• Research firm says demand indicators in U.S. look “solid”, expect demand for products to surge by 2.5 million bpd between April and August
• Also sees most increase in summer demand likely coming from the Middle East, where direct crude burn is expected to rise by ~500,000 bpd
• Says record 4.7 billion passengers expected to take to fly in summer months, up from previous record of 4.5 billion in 2019, according to International Air Transport Association
• Sees refinery runs globally ramping up post maintenance and estimates global refinery runs to surge by 3.5 million bpd from April to August, with idled capacity in China coming back online and Russian refineries restarting
• “Despite the price moves it does not look like the short base by speculative investors has been closed, with more room for financial demand to recover”
(Reporting by Seher Dareen in Bengaluru)