Given the persistent possibility of increased supply if prices rise quickly, Deutsche Bank strategists do not expect significant further oil price hikes over the next 12 months. OPEC+ has so far managed to keep increases in its own output to a minimum, but tensions remain (for example, surrounding Iranian production), and demand recovery will be contingent on continuing coronavirus containment. Furthermore, US oil output may not remain dormant indefinitely “Oil prices have risen in recent months due to expectations of ongoing global demand growth. OPEC+ production restraint and lower global oil stockpiles have also aided, while US output is only slowly increasing.”
“In the medium run, concerns about the effects of the coronavirus on Asian demand may hold back price increases, but greater OECD travel demand should offset minor increases in global supply.”
“WTI forecast (12-month forward): $63/bbl by end-June 2022.”
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