TD on oil – don’t see a material surge above $100/bbl – but watch for MidEast escalation

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I posted analysis from TD here earlier:

Adding some more remarks, including forecasts for WTI:

  • current positioning analytics suggest that substantial buying activity could take place north of $90.50/bbl in Brent, supporting continued strength
  • the risk premium driven by the current Israel-Hamas conflict, prompts us to say that WTI crude will trade above the $90/bbl mark in the final quarter of the year, with Brent coming close to the triple digit mark.
  • at this point, we don’t see a surge materially above $100/b, as we expect OPEC+ to continue supplying crude at planned levels and we judge that the presence of the US aircraft carrier strike group and military aircraft close to Israel is likely to keep crude flowing without meaningful interruptions
  • any spread of violence to the (Strait of Hormuz) region that would materially interrupt these flows has the potential to send prices surging to new highs. In such a scenario, $150+/b crude would very much in the cards

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