In a research note sent to Rigzone late Tuesday by Natasha Kaneva, Head of Global Commodities Strategy at J.P. Morgan, analysts at the company, including Kaneva, said “based on numerous recent discussions with institutional and corporate clients”, they “conclude that the sentiment on oil is neutral to optimistic, particularly within the corporate community”.
“Many believe we are in a ‘peak Trump’ phase, suggesting that the worst is behind us and we are now entering a period of de-escalation,” the J.P. Morgan analysts stated in the research note.
“There is a prevailing view that the tailwinds from trade deal announcements and the administration’s shift in focus from tariffs to taxes and deregulation will drive oil prices back into the mid-$70s following the recent downturn,” they added.
In the note, the analysts said this perspective is evident in investor positioning and the term structure of oil and oil products.
“Money managers increased their net-long positions in Nymex WTI to the highest level since late January last week, while short positions in Brent fell by the most since October,” they highlighted.
“Brent’s prompt spread hit its strongest level since January, and open interest on Brent climbed to a new record, with Brent September $95 calls trading more than 10,000 times last Tuesday,” they added.
“Additionally, the Nymex gasoline crack settled at its highest level since the start of the month, following an eight-week consecutive drop in U.S. stockpiles, and despite concerns related to demand, product cracks in the U.S. continue to remain firmly in backwardation,” they went on to state.
The J.P. Morgan analysts noted in the publication that the recent de-escalation in trade talks has reduced the probability of a bear case but warned that “the ‘Trump put’ does not extend to energy, as the administration continues to prioritize lower oil prices to manage inflation”.
“On the demand side, markets may be underestimating the final tariff levels that the Trump administration plans to impose on U.S. imports,” the analysts said in the note.
Rigzone has contacted the White House for comment on the research note sent to Rigzone by Kaneva. At the time of writing, the White House has not responded to Rigzone.
The J.P. Morgan research note showed that the company is projecting that Brent crude oil will average $66 per barrel in 2025 and $58 per barrel in 2026. The company expects WTI crude oil to average $62 per barrel this year and $53 per barrel next year, the note outlined.
According to the note, J.P. Morgan sees Brent averaging $67 per barrel in the second quarter of this year, $63 per barrel in the third quarter, $61 per barrel in the fourth quarter, $55 per barrel in the first quarter of next year, $57 per barrel across the second and third quarters of 2026, and $60 per barrel in the fourth quarter of next year.
J.P. Morgan expects the WTI price to come in at $63 per barrel in the second quarter of 2025, $59 per barrel in the third quarter, $57 per barrel in the fourth quarter, $51 per barrel in the first quarter of 2026, $53 per barrel across the second and third quarters of next year, and $56 per barrel in the fourth quarter of 2026, the note showed.
J.P. Morgan’s research note highlighted that Brent averaged $82 per barrel and WTI averaged $76 per barrel in 2024. It pointed out that the former averaged $81 per barrel in 2023 and the latter came in at $76 per barrel again in 2023.
On its site, J.P. Morgan describes itself as a leading global financial services firm with assets of $3.9 trillion and operations worldwide. The company has “a legacy dating back to 1799”, its site points out.
To contact the author, email andreas.exarheas@rigzone.com
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