JP Morgan increases oil price outlook, but reduces demand growth forecast

(Reuters) – Investment Bank JP Morgan on Friday raised its forecast for oil prices, but lowered its growth forecast for gross world demand this year due to growing uncertainty on international trade.

The US Bank has indicated that crude oil prices Brent, the international benchmark for oil markets, would reach per barrel in 2018 and 2019, up from an earlier forecast of $ 65 and $ 60 per barrel respectively. Brent was around $ 74 on Friday LCOc1.

"The uncertainty surrounding the actual production of OPEC increases, the current budget constraints and the effects of sanctions could cause a rise in oil prices in the short term," the team said. European Equity Research Unit.

The Organization of the Petroleum Exporting Countries agreed in June modest increases in oil production from July but it is not yet known how they will materialize while the United States will reimpose sanctions against oil. main supplier of crude oil in November.

However, the bank said oil prices would be capped by "the increase in OPEC's spare capacity and the economy of short-cycle shale wells in the US against a growth moderate demand in 2018/19 ".

Revised 2018 demand growth outlook at 1.2 million barrels per day (1.4 billion barrels per day), although its 2019 forecasts edged up to 1.1 million barrels a day barrels per day against 1 million. The global macroeconomic outlook, the weakness of emerging currencies, the impact of the latest rise in oil prices, the impact of sanctions on Iran and the growing trade uncertainties are all potential risks for the country. growth in oil demand.

Washington and Beijing are plunging into a trade war between the two countries, with high tariffs on goods. JP Morgan said it was expecting the global oil supply to remain robust despite short-term disruptions, which should allow OPEC to supply it. in 2018 to about 32.9 million bpd.

The non-OPEC supply is expected to increase by 2.2 million bpd by 2018 and 1.7 million bpd in 2019, "driven by the United States, Canada, Russia, Kazakhstan and Brazil ".

The bank added that the volatility observed in the oil markets this year should continue.

"We expect continued price fluctuations in the range of $ 50- $ 80 / barrel, with a decline in the medium-term band and a wider Brent / WTI gross differential."