Assessing the bullish and bearish narratives.
Volatility has been the name of the game in oil markets where we have recently seen some very sharp movements in oil prices and spreads.
This reflects the high degree of uncertainty surrounding the oil market both on the supply and the demand side, but also lower liquidity which is amplifying some of these price movements. And these are reflected in two contrasting narratives: The super bullish scenarios which are projecting sharp acceleration in prices and focusing on the supply side of the market and the super bearish scenarios which are projecting a sharp decline in the oil price and focusing on the demand side and recessionary fears.
This new OIES presentation empirically assesses these two narratives via forecast scenarios that attempt to stress test the upside and downside extremes of the short-term price outlook to 2023.