Bank of America raised its Brent oil price forecast by $14 to $96 a barrel for the last quarter of this year, attributing the recent surge in prices to a combination of increasing refining margins and deep production cuts from Saudi Arabia and Russia.

“With OPEC+ committed to curbing oil supply into year-end and China stimulus poised to expand into 4Q23, we expect global oil stocks to decline by 70 million over the coming 3 months,” the bank said in a note dated Tuesday.

The investment bank now sees Brent averaging $91 a barrel in the second half of this year, up from $81 prior. BofA raised its 2023 average forecast to $85 a barrel, from $80, as it sees a deficit of more than 900,000 barrels per day in the second half of 2023.

Benchmark Brent futures LCOc1 were trading around $97 a barrel on Thursday, while U.S. West Texas Intermediate (WTI) crude CLc1 was at $94. O/R

The bank maintained its $90 forecast for 2024 and expects a relatively balanced market, but starting with a much lower level of inventories and more spare capacity that could help support a backwardated oil market for much of next year, it said.
Source: Reuters (Reporting by Bengaluru Commodities desk)