J.P. Morgan updates oil outlook as U.S.-Iran tensions continue

J.P. Morgan commodity analysts said their oil-market outlook now includes a broader range of possible outcomes as U.S.-Iran tensions continue to affect energy flows and pricing. The bank estimated September Brent crude fair value near $90 per barrel while the benchmark was trading around $106, indicating that prices reflected the possibility of additional supply interruptions. J.P. Morgan estimated that roughly 10 million barrels per day of supply had already been affected, while recent regional developments have kept transportation routes and energy infrastructure in focus. Guardian Energy Partners has also covered recent oil-price movements connected with U.S.-Iran developments.

The analysts said global crude and refined-product inventories have declined by about 555 million barrels since the disruption began, considerably less than the roughly 1.6 billion barrels they initially expected. At the same time, oil demand has been running about 4.4 million barrels per day below year-earlier levels, helping the market balance with fewer inventory withdrawals. J.P. Morgan said available inventories can still provide a meaningful supply cushion, with China potentially able to release about 120 million additional barrels by year-end. If Middle Eastern flows remain near current levels, the firm’s framework suggests fourth-quarter and December oil prices could run approximately $7 and $8 per barrel, respectively, above its existing forecasts. Related market context includes the recent Saudi East-West pipeline shutdown and its effect on global supply routes.

Source: Rigzone

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