Oil Market Uncertainty: JP Morgan Sees No Clear Endgame

JP Morgan analysts have expressed uncertainty about the future of oil markets due to ongoing disruptions in global supply. The bank stated that it cannot model an endgame for the market, as initial assumptions about economic thresholds have been crossed without a clear exit strategy.

The conflict between the US and Iran has resulted in significant supply losses, with 10 million barrels per day already disrupted. Oil prices have climbed above $100 a barrel, reaching $106, while gasoline prices have hit $4.37 a gallon. US diesel prices have reached an all-time high of $6.31 a gallon as winter approaches.

JP Morgan estimated the fair value of oil at around $90 a barrel for September, suggesting that markets are pricing in further supply losses. The bank noted that inventories sit at all-time lows and that global oil demand has run below year-ago levels by 4.4 million barrels per day.