DistantNews
Support us
🇹🇼 Taiwan /Economy & Trade

Oil Prices to Plunge to $70, Boosting Global Stocks: JPMorgan

From Liberty Times · () Chinese

Translated from Chinese, summarized and contextualized by DistantNews.

At a glance

News Sources not specified Context piece
  • JPMorgan strategists predict oil prices could fall to $70 per barrel in the coming weeks.
  • This forecast is driven by expectations of a US-Iran peace agreement improving crude supply prospects.
  • Falling oil prices are expected to boost global stock markets and potentially enable central banks to lower interest rates.

JPMorgan strategists anticipate a significant drop in oil prices, potentially reaching $70 per barrel within weeks, a forecast bolstered by the prospect of a US-Iran peace agreement. This development is expected to improve global crude supply outlooks, according to strategist Ward.

The anticipated decline in oil prices is seen as a catalyst for a renewed market rotation, previously stalled by geopolitical tensions surrounding Iran. This shift could provide a substantial tailwind for stock markets globally. Furthermore, lower energy costs might create room for central banks to consider interest rate cuts, offering additional support to equities.

Brent crude prices have already reacted, falling over 5% to below $83 per barrel on Monday. Karen Ward, Chief Market Strategist for EMEA at JPMorgan Asset Management, stated that a finalized agreement between the US and Iran could increase global oil supply, reigniting cross-industry and cross-regional market rotations that were disrupted by the Iranian situation.

As the US and Iran reach an agreement, oil prices are expected to continue falling, reigniting the market rotation that was previously interrupted by the Iranian situation, bringing a 'huge tailwind' to the stock market.

— Karen WardJPMorgan's Chief Market Strategist for EMEA on the potential impact of a US-Iran agreement on oil prices and stock markets.

Ward suggested that the drivers for this oil price decline extend beyond the US-Iran negotiations. She pointed to weakening cohesion within OPEC, potentially leading Gulf states to accelerate the monetization of their reserves at current price levels, further increasing global supply. However, some market participants remain cautious due to uncertainties surrounding the agreement's details and potential logistical hurdles for shipping through the Strait of Hormuz.

The market is already reflecting these expectations, with stocks and bonds rising in tandem and increased anticipation of central bank rate cuts, despite the European Central Bank's recent 25 basis point hike due to inflation concerns.

Oil prices may fall further to $70 per barrel in the coming weeks.

— WardJPMorgan strategist Ward's specific price forecast for crude oil.
DistantNews Editorial

Originally published by Liberty Times in Chinese. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

More Stories

From Our Blog