On a 12-month horizon, strategists at Deutsche Bank do not expect major further oil price gains, given the continued threat of increases in supply if prices rise fast. OPEC+ has managed so far to limit increases in its own output, but there are a number of tensions (e.g. around Iranian production), and demand recovery will be dependent on continued coronavirus control. What’s more, US oil production may also not remain quiescent forever.
US oil producers remain disciplined
“Expectations of global continued demand growth have pulled oil prices up further in recent months. OPEC+ production discipline and reductions in global oil inventories have also helped, while US output is only increasing very slowly.”
“Concern about the implications of coronavirus for Asian demand may hold back price rises in the short-term but higher OECD travel demand should offset slight rises in global supply.”
“End-June 2022 WTI forecast (12-month forward): $63/bbl.”