Crude Oil Prices At the Highest Since October With Brent Crude Hitting $88 Per Barrel

Crude Oil Illustration

Oil futures maintained their upward trajectory on Tuesday, propelling WTI crude oil to its loftiest point since October.

WTI crude oil futures (CL=F) momentarily surged past $85 per barrel on Tuesday, while Brent crude (BZ=F), the international benchmark, surged above $88 per barrel.

The escalation in oil prices since the beginning of the year coincides with mounting tensions in the Middle East, drone attacks targeting Russian refineries, and anticipations of OPEC+ sustaining its production cuts until at least June.

Russia declared additional output reductions, prompting JPMorgan analyst Natasha Kaneva to ponder the possibility of Brent crude oil reaching $100 per barrel by September.

“Without any intervening policy, supply adjustments, or shifts in demand, Russia’s actions could propel Brent oil prices to $90 as early as April, surge to the mid-$90s by May, and approach $100 by September,” Kaneva and her team stated in a recent note.

Across Wall Street, analysts have been revising their price projections as crude oil has surged by over 15% this year.

In March, Morgan Stanley strategist Martijn Rats revised his Brent crude price estimate upward by $10 per barrel to $90 by the third quarter of this year due to “tighter supply/demand balances.”

Meanwhile, Goldman Sachs analysts remarked last week, “We anticipate Brent crude oil prices to remain robust at the upper end of our $70-$90/bbl [per barrel] range for the remainder of the year.”

Kaneva and the JPMorgan team anticipate Brent prices to hover around current levels into the latter half of this year.

The firm elaborated, stating, “Ukraine’s escalating attacks on Russian oil infrastructure, particularly refineries, represent an ongoing geopolitical risk and exacerbate the existing tightness in refined products,” further emphasizing that “the risks to physical oil flows remain elevated.”

“The lessons drawn from the 2022 energy crisis underscore that there are several effective measures to mitigate the impact of high prices,” JPMorgan noted.

“Our perspective remains that given the strength of the US dollar and high borrowing costs, oil prices significantly exceeding $90 can lead to significant disruptions in global oil demand — as witnessed in March-June 2022 and in September-October 2023 — thereby resulting in lower prices.”

Nate O'Hara
Nathan is a seasoned commerce writer with a passion for unraveling the intricacies of the business world and distilling them into engaging narratives. During his academic journey, he delved deep into subjects like economics, marketing, and entrepreneurship, honing his analytical skills and developing a keen understanding of market dynamics.