J.P. Morgan Global Commodities Research maintains Brent oil averaging $80 per barrel (bbl) in 4Q24.

Crude prices are set for 10% weekly gains as investors weighed the prospect of a wider Middle East conflict, Brent crude futures LCOc1 trading at $78.71 a barrel while U.S. West Texas Intermediate crude futures CLc1 trading at $74.79 a barrel.

However, Brent and WTI fell 17% and 16% respectively in Q3, as lower oil demand, especially from China, weighed on an oversupplied market.

J.P. Morgan says given the low level of oil inventories, odds favor a sustained geopolitical premium in crude price until the conflict is resolved.

“Shifting dynamics in the Middle East might create a greater urgency to replenish inventories, thereby realigning the price of oil with its fundamental level”.

Notes that Israel attacking Iran’s oil facilities is unlikely to gain favor with the U.S. administration, which could disrupt oil markets before presidential elections.

Also sees a low probability of Iran targeting energy flows from Gulf Arab states, given the recently upgraded diplomatic ties with GCC countries and Israel.
Source: Reuters (Reporting by Pooja Menon in Bengaluru)