Oil Price Forecast - Nov 30

[dan_s]

Business Insider: Oil prices will hover near $90 in 2023 as Russian production bounces back to pre-war levels, JPMorgan says.

Oil prices will head higher in 2023, but not as much as JPMorgan originally expected, according to a Monday note. The bank lowered its 2023 Brent crude oil forecast to $90 per barrel from $98 on the grounds that Russia will normalize its oil production to pre-war levels. With Brent crude oil currently trading at $83.55 per barrel, JPMorgan's forecast represents just 8% upside potential next year. If Russia's oil production levels normalize as JPMorgan expects, it will likely find a big buyer in India. "Essentially, the US signaled it is 'happy' for India to continue buying as much Russian oil as it wants... as long as it doesn't use Western insurance, finance, and tankers," JPMorgan explained. Dynamics surrounding the Biden administration's need to refill the US strategic petroleum reserve should also be supportive of oil prices going forward.

MY TAKE: Assuming the draws from the SPR will stop before year-end, and we don't go into a major recession, I believe WTI will rise to $100/barrel early in 2023. That said, I will be adjusting my oil & gas price deck mid-December.