Analysts at the bank's wealth management do not expect recent price declines to continue, given the well-established fundamentals of the oil market, and expect global oil demand to hit a record high in August, unlike other commodity markets.
The reasons are: -
- Chinese demand hit a record high this year, despite recent economic data.
- Oil stocks are declining, narrowing the market.
- OPEC + production is nearing a two-year low and the supply looks set to remain tight.
- OPEC + has urged voluntary production cuts since May in order to tighten oil markets. Saudi Arabia and Warsea then cut production until September, and with Saudi Arabia and Russia expanding their production restrictions, we expect global oil markets to suffer supply shortages of about 2 million barrels per day in August, and more than 1.5 million barrels per day in September.
At the end of the day, the bank expects Brent to reach $95 a barrel and the U.S. West Texas Intermediate (WTI) crude index to rise to $91 a barrel by the end of December.
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