A weak supply response and tight inventories to keep oil prices elevated – Deutsche Bank

Despite lockdowns in China holding back domestic oil demand the price of black gold has remained above $100. Economists at Deutsche Bank expect oil prices to remain at high levels. 

Chinese demand to recover quickly

“With lockdowns in China being scaled back, we expect Chinese demand to recover quickly, particularly given likely policy stimulus.” 

“Restrictions on Russian supplies are set to remain in place and boosts to global supply look unlikely.” 

“Continued capital discipline in the US means that only a limited increase in US production looks likely over the next 12 months and production remains below pre-Covid levels.”

“We expect OECD inventories will take some time to claw their way back to pre-covid levels.”