Brent oil - JP Morgan on the price jump - clearly a supply shock - ForexLive
Brent oil - JP Morgan on the price jump - clearly a supply shock | Forexlive
Earlier in the week an analyst at JP Morgan said that:
- "investors should probably not worry too much about the recent spike in oil."
Adding that pressure on the demand and supply side is easing:
- long-term investment into energy transition will dampen demand
- the US increasing domestic oil supply is continuing to ramp higher
Which all sounds a bit overly optimistic to me, especially in the near term.
The latest update from the bank on the higher price blames “clearly a supply shock" (ie the OPEC/Russia output cuts extensions)
- Combined, the OPEC+ alliance is holding back more than 4 mbd from the market, which is the highest level of cuts outside of recessions over the last two decades.
Related Knowledge Center: ENERGY BASICS: petroleum
While electric-powered vehicles may be the ride of the future, oil remains at least for now the dominant fuel for transportation around the world. And after a period of time at the end of the 20th century when oil was subject to wide fluctuations in price, new supplies in North America as a result of non-conventional recovery techniques have helped stabilize prices.