Julius Baer expects oil to remain at $60: "This is the era of abundance and depressed prices."

Oil prices remain low, and the situation is unlikely to change in the short term. This is the forecast from Julius Baer, as experts at the Swiss bank point out that crude oil " has entered a period of abundance and depressed prices , characterized by both peak US production and Chinese consumption," and they expect it to trade above $60.

Julius Baer experts, who maintain a neutral view on oil, justify this view because "the fundamental outlook for oil remains unchanged. Weak demand and the radical change in policy in oil-producing countries should lead to an increase in supply in the coming months," explains Norbert Rücker, Head of Economic Research and Next Generation at Julius Baer.

The agency notes that demand is robust and oil production is stagnating, but the supply constraints temporarily observed earlier this year were likely due more to trade than other fundamental trends. Oil storage in North America is increasing, despite weaker production and solid demand. After years of growth, U.S. exports of crude oil and oil products are stagnating. It remains to be seen whether this is a consequence of intensifying competition in global markets due to increased exports from South America and the Middle East . However, this makes oil less of an option for addressing trade deficits.

The focus, they argue, has shifted from geopolitics and fear-driven mood swings to "the normalization of supply from oil-producing countries and overall weak demand." They further argue that "the upcoming talks on the war in Ukraine are likely to generate some political buzz, but are unlikely to have a significant fundamental impact."

The price of Brent crude oil, the European benchmark, is currently trading at around $65.80, a far cry from the $74.64 it opened at this year. In fact, it is one of the commodities with the worst performance this year, falling nearly 12% by 2025 , behind only cocoa, natural gas, corn, and sugar.

Oil prices remain low, and the situation is unlikely to change in the short term. This is the forecast from Julius Baer, as experts at the Swiss bank point out that crude oil " has entered a period of abundance and depressed prices , characterized by both peak US production and Chinese consumption," and they expect it to trade above $60.