Brent Crude Oil Price Forecast – Goldman Sachs, JP Morgan, Citi

Summary:
• Brent crude oil price has remained in a tight range in the past few weeks as investors watch the ongoing supply and demand dynamics

Brent crude oil price has remained in a tight range in the past few weeks as investors watch the ongoing supply and demand dynamics. It was trading at $93.13, which was slightly above September’s low of $86.20 but more than 32% below the YTD high. WTI crude oil price was trading at $90 on Wednesday.

Goldman Sachs, Citi, Morgan Stanley, JP Morgan oil forecast

Crude oil price has held steady as investors focus on multiple moving parts. The European Union will ban Russian oil in the next two weeks. Such a move will see Russia’s oil shipments to the bloc crash by more than 1 million barrels. Recently, however, Russia has managed to reroute some of this oil to Asian countries.

Brent crude oil price has also consolidated as investors watch the recent supply limits by OPEC+. Early this month, the cartel agreed to slash production in a bid to boost prices. With Saudi Arabia and US tensions rising, there is a likelihood that Saudi will work to boost prices in the coming months.

Meanwhile, signs that China is reopening will help to boost prices. Last week, China decided to reduce the number of quarantine days. These are signs that life will move back to normal in China in 2022. Chinese oil imports have already risen by 2 million barrels per day since summer.

Goldman Sachs oil forecast is that Brent will rise to $115 in 2023. It attributed that to China’s reopening and a fall in US shale production. Also, an end to US Strategic Petroleum Reserves (SPR) draw will boost prices.

Meanwhile, Citi said that crude oil price could soar to $120 per barrel if there are significant supply disruptions. Precisely, it pointed to disruptions in places like Libya and Nigeria.

Analysts at JP Morgan also expect oil prices to be elevated. In an interview, JP Morgan’s Malek said that underinvestment could push Brent to $150.

Brent crude oil price forecast

The daily chart shows that the Brent crude oil price has been in a tight range recently. Still, it has managed to move above the upper side of the descending channel shown in black. It is also consolidating at the 25-day and 50-day moving averages while the RSI has moved to the neutral point at 50.

Therefore, in the immediate near term, there is a likelihood that prices will remain in this range. They will then move above $100 towards the end of the month. A drop below the support at $89 will invalidate the bullish view.