Oil Price Forecast - May 23

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UBS on Thursday forecast Brent crude prices to rise to $91 per barrel over the coming months, citing an undersupplied oil market.

The investment bank expects the eight Organization of the Petroleum Exporting Countries' (OPEC+) member states with voluntary production cuts to extend them for at least three months, stating that compliance with the production cut deal remains important.

"As in recent years, we see a mismatch between market sentiment toward oil and what demand-side tracking data indicates," UBS commodity analyst Giovanni Staunovo said.

"We retain a modestly positive outlook for crude prices over the coming months, supported by healthy demand and efforts by OPEC+ countries' to keep the oil market in balance," Staunovo added.

UBS also estimates demand growth of 1.5mbpd for 2024, which is above the long-term annual growth rate of 1.2mbpd, as latest data supports a stronger growth view, the brokerage says.

OPEC in a monthly report in May said it expects world oil demand to rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025.

OPEC+, which groups OPEC and allies led by Russia, meets on June 1 to decide whether to extend voluntary oil output cuts into the second half of the year.

ANZ Research said an extension to output cuts could lead oil prices to $100 a barrel.