Petroleum News, page-334

Aramco’s chief executive warned that years of underinvestment in new oil production are beginning to bear fruit, which is an undersupplied market.Despite these statements that suggested oil prices should move higher, oil fell for much of the week. Yet it wasn’t dragged down by fundamentals. Oil prices are down because many traders and investors are bracing for a recession.The bad news is that even in a recession, oil prices can go higher, and this is exactly what some of those banks that kept JP Morgan company at last week’s Congress hearing expected.Actually, JP Morgan was one of the bullish forecasters. Last week, the banking major’s analysts wrote in a note that they expected Brent crude to rebound to $101 in the fourth quarter. The analysts cited tighter supply as the reason for their forecast.Goldman Sachs is even more bullish. Three weeks ago, the bank’s analysts said Brent could hit $125 next year despite the oil price cap touted by the G7 as a tool both for keeping the market supplied with Russian oil and for lowering prices. They remain bullish to date.