The situation in Ukraine is likely to remain in focus for the foreseeable future. Subsequently, strategists at Deutsche Bank believe that the geopolitical situation will keep oil prices at elevated levels.

Scepticism on OPEC+ reaching its announced baseline production levels

“A deal with Iran could bring more capacity to the market and producers in the US are likely to start cashing in on price strength with the rig count gradually ticking up. This should result in supply potentially outpacing demand in the coming quarters.” 

“OECD commercial inventories are at their tightest levels in more than seven years and roughly 8.5% below the previous five-year seasonal average. The fact that rebuilding these inventories to pre-Covid levels will be a lengthy process should cushion the price impact of a surplus market.”

“The situation in Ukraine is likely to remain in focus for the foreseeable future. Western demand for oil from outside Russia should provide a sustained tailwind for prices. We therefore expect a WTI price of $110/b by the end of March 2023.”