JP Morgan: No Clear Scenario Can Be Drawn for the Oil Market Due to Conflicts
Following the attacks by the US and Israel on Iran, JP Morgan announced that for the first time they could not establish a clear baseline scenario for the oil market.
Due to the ongoing conflicts and the attacks by the US and Israel against Iran, JP Morgan analysts reported that, for the first time, they were unable to establish a clear baseline scenario regarding the oil market.
No Clear Scenario Exists
The conflict environment, which began with the US and Israel's attack on Iran and continues with Iran's retaliations, makes forecasts in the oil market quite difficult.
Bank analysts explicitly stated that for the first time since the war began, they could not put forward a clear baseline scenario for the oil market.
Fair Value and Prices
JP Morgan calculated the fair value of Brent crude for September at approximately 90 dollars per barrel.
The current price of around 106 dollars indicates that the market is pricing in supply losses and the likelihood of new cuts.
Record Levels in the US
With oil prices rising above 100 dollars in the US, there has been a notable increase in fuel prices.
The gallon price of gasoline reached 4.37 dollars, while diesel prices rose to 6.31 dollars, breaking records and pushing inventories to rock-bottom levels.
Inventories and Decline
The decline in global demand and the fact that inventory utilization remained below expectations partially limited the upward trend in prices.
It was noted that since the onset of the conflicts, global crude oil and refined product inventories have decreased by approximately 555 million barrels.
Supply and Pipeline Status
The International Energy Agency announced that global oil supply and demand will decline more this year compared to earlier forecasts.
Damage to the stations on the East-West pipeline and the deactivation of the Yanbu line could impact global supply.