7th May, 2020
JPMorgan analysts think the worst of the oil market carnage may be over, though the commodity is trading at a historic low.
The coronavirus pandemic and the ignition of a price war between Russia and the Saudis had pushed oil futures below $0 for the first time on April 20.
Since then, producers have worked to curb supply and lift prices.
After weeks of emergency action, inventories are finally turning toward recovery.
The bank’s analysts expect demand to bounce back over the next two to three months and shift oil surpluses to deficits in the second half of the year.
“While there is still a massive glut of oil that will need to be cleared before there can be any meaningful recovery in prices, we believe that the global oil market is tentatively entering an inflection phase, where rebalancing has started,” the team led by Joyce Chang wrote Thursday.
Oil’s recent price moves lend credence to the analysts’ thesis, reports Market Insider.
West Texas Intermediate crude has more than doubled from its late-April lows, and Brent crude has enjoyed a moderate rally in recent sessions.
Even if the oil market turns for the better, the coronavirus’ fallout will create lasting scars, JPMorgan said.
Read the original at Market Insider