A UBS analyst note on the oil price says their base case is that the price will not rise above $100 a barrel on a sustained basis over the next year.
Such a rise would draw a step higher in US production as well as weighing on demand.
UBS on supply factors:
- Saudi Arabia and Russia extending their extra supply cuts until the end of the year
- US oil output growth likely to slow as a result of lower drilling activity in recent months
- Global visible oil inventories fell sharply in August, at their lowest since July 2022 (citing International Energy Agency info)
On demand factors:
- Global oil demand is at a record 103 million barrels a day
- reopening of China and solid demand growth in India
- expect the rise in demand to slow back to the long-term growth rate of around 1.2 mbpd in 2024
- demand will continue to rise