JPMorgan analysts have advised investors to expect crude demand to decline this quarter after rallying last quarter. Oil increased by an average of 28% last quarter, hitting a yearly high in September amid OPEC+ supply cuts and further output reductions by Saudi Arabia and Russia.
“After reaching our target of $90 in September, our end-year target remains $86 [per barrel],” Natasha Kaneva, head of the global commodities strategy team at JPMorgan announced. Kaneva claimed that oil inventories should build up during the final months of the year.
“Demand destruction has begun,” the note from JPMorgan read. According to the team of analysts, demand restraint is expected to be particularly prominent in the United States, Europe, and some emerging markets. They added that consumers have already hit their pain limit for gasoline; a derivative of oil.