The oil market is focused on supply constraints, so prices are likely to remain elevated. Strategists at Société Générale forecast the black gold at $130 in Q3 and $120 in Q4.

Oil prices could drop to $75-80 in a recession scenario

“With the oil industry underinvested and demand returning to normal, we expect oil prices to remain elevated: $130/bbl in Q3 and $120/bbl in Q4, with an upside risk to $150/bbl.”

“If the upside risk scenario materialises (on further supply disruption or OPEC failing to meet its production target), the subsequent demand destruction may not lead to the same downward trajectory as in 2008 (in a recession scenario, prices could drop to $75-80/bbl). The reason is the underinvestment in both upstream and downstream operations and the lack of refining capacity.”