J.P. Morgan analysts forecast Brent oil prices would end the year at $96 per barrel and that the surprise OPEC production goal cuts were a “preemptive step” to avert market surpluses until 2023.
Saudi Arabia and other OPEC nations announced further oil production limitations of 1.16 million barrels per day, a surprise move experts said would instantly hike prices and the US called “inadvisable.”
Monday’s surprise raised oil prices.
Brent crude was up 5.5% from its month-high of $86.44 at 0347 GMT.
Reuters reports OPEC+ will cut 3.66 million bpd, 3.7% of global demand.
Sunday’s development preceded a virtual OPEC+ ministerial panel meeting, which included Saudi Arabia and Russia, to preserve the output pact.
J.P. Morgan anticipated first-quarter action from the Biden administration and producer group.
“The most surprising feature of the news is that it was not made sooner,” J.P. Morgan analysts said on April 2. “Acting later reduces the impact on total balances and delays price impact.”
Goldman Sachs raised its December 2023 and 2024 Brent projections by $5 to $95 and $3 to $100, respectively.
