UBS reported that the Brent oil price remained steady at $83 per barrel in June. The broker has revised its oil price forecast for the second half of 2024. They now expect prices to reach $86 per barrel in the third quarter, up from the previous forecast of $84. For the fourth quarter, the forecast has been adjusted from $81 to $83 per barrel.
The report highlighted an anticipated supply deficit of 1.4 million barrels per day in the third quarter of 2024. This deficit is expected to decrease to 500,000 barrels per day in the first quarter of 2025. The change is due to a seasonal drop in demand, even as oil demand rebounds seasonally and supply growth remains limited. Additionally, OPEC+ announced on June 2 that it would phase out voluntary production cuts. However, UBS predicts that OPEC+ will resume increasing production in the second quarter of 2025.
UBS continues to favor and recommend three major oil stocks: CNOOC (00883.HK), PETROCHINA (00857.HK), and SINOPEC CORP (00386.HK). They believe that OPEC+ production cuts could support oil prices in the third quarter of 2024.