The focus of the markets appears to have shifted from the geopolitical context, pointing to looser rather than restrictive fundamental supply and demand conditions in the future. This is the assessment of Julius Baer, which released a note to customers and the market on Friday, reinforcing the view of a decline in the price of the energy commodity amid robust supply in North America, which will boost prices would still be around $70 this year.
“We maintain our cautious view. The optimistic mood is expected to cool and the geopolitical risk premium is likely to disappear,” warns Norbert Ruecker, Head of Economics and Next Generation Research at Julius Baer.
Julius Baer points out that recently released data indicates a “surprising increase in oil supply” in the United States, while in Canada a pipeline service is coming online, providing a direct export hub to Asia, and next year the first major liquid terminal fuels. is expected to accelerate operations.
“Both projects aim to reshape the energy market and maintain the country’s status as a raw materials superpower,” concludes Ruecker.
On the other hand, demand is expected to stagnate, with a still tight labor market in the United States and economic challenges in China. In America, production growth appears to be sufficient to offset the expansion of consumption in emerging economies, the expert said.
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