Oil: 2020 price forecast upgraded on OPEC+ cuts, improved economic outlook – JP Morgan

In the wake of the OPEC and its allies (OPEC+) deeper output cuts and improved Emerging Markets (EM) economic outlook, the US investment bank, JP Morgan raised its oil price outlook for 2020.

Key Quotes:

“Brent price forecast upped to $64.5 per barrel in 2020 from $59 earlier, although it expects prices to slip to $61.50 in 2021.

West Texas Intermediate prices are seen following a similar trajectory with prices averaging $60 per barrel in 2020 and $57.50 in 2021.

The end of UK electoral uncertainty and the U.S.-China trade truce along with fading of idiosyncratic headwinds in some of the larger emerging markets economies have improved the global growth outlook for next year

In contrast to our September forecast that the global oil market will be in surplus of 0.6 million barrels per day (mbpd) on average for 2020, we now estimate the market will be in deficit of 0.2 mbpd

Continue to expect global oil demand growth at 1 mbpd. The OPEC, Russia and other producers, a group known as OPEC+, have agreed to cut output by an extra 500,000 barrels a day in the first quarter of 2020.”