JPMorgan Abandons Oil Price Forecast Amid Ongoing Iran Conflict
JPMorgan Chase has abandoned its crude oil price forecast due to the ongoing Iran conflict. The bank's head of global commodities strategy, Natasha Kaneva, stated that they 'simply don't know how to model the endgame' as several economic redlines have been crossed.
The initial prediction was that U.S. President Donald Trump would be forced into an agreement to reopen the Strait of Hormuz waterway due to crude oil prices above $100, retail gas prices near $5 a gallon, and the 10-year Treasury yield above 5%. However, six months later, these redlines have been crossed, yet there is no clear exit strategy.
Crude prices are now above $100, with Brent crude trading near $105 per barrel. Diesel fuel has also reached an all-time high of over $6 per gallon. The bank estimates that the fair price for Brent crude oil is around $90 per barrel.