• Home
  • Cryptocurrencies
  • Stocks
  • Commodities
  • About
    • Code of Ethics
    • Risk Warning
    • Privacy Policy
  • Contact
rkdream

Type and hit Enter to search

  • Home
  • Cryptocurrencies
  • Stocks
  • Commodities
  • About
    • Code of Ethics
    • Risk Warning
    • Privacy Policy
  • Contact
crude oil price
Commodities

Crude oil price outlook: the market is at a make-or-break point

Faith Nyawira
Faith Nyawira
July 4, 2022 2 Mins Read
36 Views
0 Comments

Crude oil price is back above the critical support zone of $110 after dropping below it late last week. Since mid-May, Brent futures has been trading steadily above this level. However, for about two weeks now, the support has somewhat weakened as the opposing forces of recession woes and supply tightness impact the global market. As at the time of writing, Brent oil was at $111.00; down by 0.34%. At the same time, WTI futures were down by 0.79% at $107.63.

crude oil price
crude oil price

CBA forecast

 The easing of COVID-19 restrictions in China and the subsequent recovery of its economy saw crude oil price rebound to a three-month high of $125.25 in mid-June. Nonetheless, slowed global economic growth is overshadowing the improvement in China’s economy.

During an interview on Bloomberg Markets, Vivek Dhar, a mining and energy commodities analyst at the Commonwealth Bank of Australia (CBA) stated,

“we are going to see through this year more pressure build. It’s going to be different for different commodity classes. For energy, we definitely see demand destruction playing out by the end of this year and prices to fall as a result of that”.

Granted, he acknowledged that as it is, there is yet to be demand destruction. However, as the year progresses, the bank expects that to be a reality. Subsequently, its forecast is for Brent oil to drop to $100 per barrel in Q4’22.  

Worst-case scenario

Late last week, analysts from JP Morgan warned that crude oil price may surge to a “stratospheric” level of $380 per barrel. The forecast is founded on the argument that Russia may respond to the West’s penalties by cutting its oil output.   

G7 nations are looking to cap Russian oil price in an attempt to further pin Russia to the wall for invading Ukraine. However, as stated by JP Morgan analysts, the country is in a position to lower its production by 5 million barrels per day without extensively damaging its economy. Even so, the impact of such a move to the rest of the world would be massive. The investment bank forecast a rise in Brent futures to $190 if the country cuts its daily supplies by 3 million barrels. The worst-case scenario of a  5 million bpd cut would push the prices to $380.  

As stated by the International Energy Agency (IEA), Russia is the third largest producer of oil after the United States and Saudi Arabia. At the same time, it is the world’s largest oil exporter and second largest crude oil exporter after Saudi Arabia.  

Related

Tags:

Crude Oil

Share Article

Faith Nyawira
Follow Me Written By

Faith Nyawira

Faith Nyawira is an experienced financial analyst with over 10 years in the industry. She started her trading career while in college. Over the years, she has worked for some of the leading financial websites like iNvezz and InvestingCube. She graduated with a Bachelor’s degree in 2013. Faith lives in Nairobi and likes spending time with her son. She is an avid golf and Formula 1 fan.

Other Articles

Glencore
Previous

Glencore Share Price Could Have a 20% Meltdown Soon

Contentos
Next

Contentos Price Symmetrical Triangle Points to a Breakout

Next
Contentos
July 4, 2022

Contentos Price Symmetrical Triangle Points to a Breakout

Previews
July 4, 2022

Glencore Share Price Could Have a 20% Meltdown Soon

Glencore

No Comment! Be the first one.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

rkdream

rkdream is a fast-growing financial website covering the latest news and analysis on cryptocurrencies, stocks, and commodities.

Quick Links

  • About
  • Code of Ethics
  • Risk Warning
  • Privacy Policy

Categories

  • Cryptocurrencies
  • Stocks
  • Commodities

Follow Us

Twitter

© 2022, All Rights Reserved.

  • Cryptocurrencies
  • Stocks
  • Commodities
Manage Cookie Consent
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}