JPMORGAN COMMODITY TEAM SAYS IT CANNOT PREDICT OIL PRICE PATH

JPMorgan's commodities team, led by Natasha Kaneva, says it no longer has a clear view on how oil markets will move amid the continuing conflict involving Iran. The team said it cannot model the situation's outcome, a shift from earlier in the conflict, when it believed the US administration would treat certain economic figures as limits: oil at $100 a barrel, petrol near $5 a gallon, inflation at 4%, and a 10-year Treasury yield above 5%. On that basis, JPMorgan had expected an agreement to reopen the Strait of Hormuz by June. It said that six months on, most of those thresholds have been crossed and no such agreement has been reached.

JPMorgan said oil prices now stand above $100 a barrel and the 10-year Treasury yield has climbed past 5%. It put petrol at $4.37 a gallon, a level it described as a seasonally adjusted record after the peak summer driving period had ended. Diesel has reached an all-time high of $6.31 a gallon heading into winter, the season of peak demand, with inventories at record lows, the bank said. JPMorgan said its exit strategy for the situation is less clear now than when the conflict began.

The same report noted increased analyst interest in Chevron among energy stocks. One Wall Street firm recommended buying BP shares, saying the company had lagged its closest rivals over the past three to five years through two energy crises. Venture Global's chief executive, Mike Sabel, discussed a new gas supply deal with China and rising demand for US liquefied natural gas. JPMorgan said the wider outlook for oil markets remains dependent on how the situation involving Iran develops.