Oil: Geopolitics a ‘noise element’ but Julius Baer sees the price at $70 this year

Investing.com – After this weekend's meeting of the Organization of the Petroleum Exporting Countries (OPEC) to discuss commodity markets and maintain supply restrictions, the Swiss group Julius Baer issued a note to clients and the market, indicating its perspective that oil prices will reach $70 this year. Geopolitics remain a ‘noise element’ that can affect prices, however.

“While the decision to incrementally phase out the supply cuts starting later this year might look surprising, it simply acknowledges that the petro-nations have grown wary of losing market share,” evaluates Julius Baer, which sees supply as ample and the market climate trending towards cooling.

“The decisions are to maintain the production quotas roughly unchanged until the end of 2025 but to gradually phase out the voluntary cuts between the end of 2024 and the end of 2025. This outcome might be rather bearish for the oil market, as production increases are now officially heralded,” points out Norbert Rücker, head of economics and next-generation research at Julius Baer.

The Swiss group also indicates market balance in recent months, even with the previously announced supply restrictions, with demand expansion compensated by increased supply, notably from the Americas.

At 14:41 ET, WTI Crude Futures, a benchmark in the United States, were down 3.70%, at $74.14, and Brent Crude Futures registered a decline of 3.49%, at $78.28.

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