Oil Prices to Face Bearish Trends in Second Half of the Year, Macquarie Warns
Rally Mode Threatened by Potential Supply Surplus
In recent weeks, oil prices have been on a rally due to concerns over geopolitical tensions disrupting global supplies. However, Macquarie cautions that if these threats do not materialize, bears may dominate the market in the coming months.
Bearish Outlook for Oil in the Second Half of 2022
Macquarie predicts a shift towards bearish trends as the year progresses, citing factors such as NOPEC supply growth, OPEC+ spare capacity reentering the market, and potential softening of demand due to inflation. This could lead to a struggle for oil prices to stay above $90 a barrel.
Geopolitical Unrest Fuels Near-Term Price Support
Despite the potential for a supply surplus, ongoing geopolitical tensions in regions like the Middle East and Ukraine are keeping oil prices buoyant. However, without actual supply disruptions, sustaining prices above $90 a barrel could be challenging.
Rising Non-OPEC Supplies and U.S. Production Surge
Concerns about a supply surplus are exacerbated by increasing non-OPEC supplies, with the U.S. leading the charge. The U.S. Energy Information Administration estimates a record-breaking 260,000 barrels per day increase in oil production, reaching 13.19 million bpd this year.
Additional Note: Despite the near-term support from geopolitical tensions, the long-term outlook for oil prices remains uncertain. It will be intriguing to see how market dynamics evolve in the second half of the year.
