JP Morgan raised on Tuesday its oil price forecasts for next year, as the investment bank expects OPEC's production cuts to be effective in conjunction with expectations for better economic?

JP Morgan raised on Tuesday its oil price forecasts for next year, as the investment bank expects OPEC's production cuts to be effective in conjunction with expectations for better economic growth in emerging markets, Reuters reported.

It is estimating that rather than oversupply, the oil market will be in a deficit next year, by 200,000 bpd. This is in stark contrast to its estimates from September, that assumed a 600,000 bpd oversupply situation for 2020. It is expected a 1 million bpd global demand growth?the same as its September forecast.

JP's new forecast for the Brent crude oil benchmark is $64.50 per barrel for next year, up from earlier projections of $59 per barrel. For 2021, the bank is expected prices to fall to $61.50.

For the US WTI benchmark, JP Morgan is expecting $60 per barrel next year.

Brent was trading up 1.24% on Tuesday, at $66.15 per barrel as the US China trade deal progress reinvigorated the oil market. It is the highest price point since the September attacks on Saudi Aramco infrastructure that took over 5 million bpd off the oil markets.

WTI was also trading up, by 1.25%, at $60.96.

Goldman Sachs also recently revised upward its oil price forecast for next year, also citing OPEC's deeper production cuts that will help to balance supply and demand. Goldman is expecting Brent crude oil to average $63 next year, with WTI averaging $58.50 per barrel, according to its revisions made last week.

Two weeks ago, JP Morgan called it for OPEC, saying it expected bigger OPEC production cuts.

The threat of rising US production, however, is a real one, with production increasing to 12.9 million bpd over the last few weeks, up from 11.7 million bpd at the beginning of the year.

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:

Oil Prices Head Higher Despite OPEC+ Skepticism
IEA: An Oil Glut Is Inevitable In 2020
US Proved Oil & Gas Reserves Hit New Record High


JP Morgan Raises 2020 Oil Price Outlook