JP Morgan sees Brent breaking above $70/b by May, $74/b by year end

London (Quantum Commodity Intelligence) – US investment bank JP Morgan said Monday it expects Brent prices to break above the $70/barrel mark by May 2021, compared to its previous forecast of $70/b by September, according to media reports referencing a client note sent by the bank.

The new forecast follows the sharp rise in oil prices last week after a spate of positive indicators, including Chinese import data, the IEA forecasting a more positive outlook for 2021 and data from the US EIA showing a sharp drawdown in crude oil inventories.

Brent futures rallied by around 6% on the week, with most of the gains coming on the Wednesday after the US Energy Information Administration reported a draw of 5.9 million barrels of crude in the week ending April 9, exceeding analyst forecasts of around 3 million barrels. 

Brent futures for June crude were trading $66.87/b at 17:45 in London (1645 GMT) Monday, up $0.10/b from Friday's settle of $66.77/b.

JP Morgan left its end-year Brent forecast little changed at $74/b, while further out the investment bank sees oil prices peaking at around $80/b in Q2 2022.