Meritz "Q2 International Oil Price Around $80... Supply Is a Variable"

Q2 US Refinery Maintenance Surge
Crude Oil Excess Demand Intensifies
"Price Surge Above $90 Unlikely"

Meritz Securities forecasted that the international oil price in the second quarter will rise to around $80 per barrel. They analyzed that future international oil prices will be more influenced by the supply dominance of the United States and the Organization of the Petroleum Exporting Countries (OPEC) than by demand.

Park Su-yeon, a researcher at Meritz Securities, stated, "From the second quarter, when maintenance of U.S. refining facilities is prominent in the spring, excess demand for crude oil will intensify, causing the international oil price (WTI) to rise to around $80."

Researcher Park pointed out, "The expectation that crude oil demand will increase slowly is already reflected in the current price," adding, "The side holding the supply dominance is not the U.S. but OPEC." She especially forecasted that the trend will become stronger after the utilization rate of refining facilities further declines.

Researcher Park emphasized that supply, rather than demand, determines the price of international oil. This is because the consensus on crude oil demand has already been established. Although specific forecasts vary by institution, the tone is similar in that the increase in crude oil demand is reduced compared to last year due to the slowdown in global economic expansion.

Researcher Park evaluated, "It is important which side is stronger and more certain between OPEC+, which wants to raise oil prices, and the U.S., which wants to stabilize them," adding, "Ultimately, it is directly linked to production capacity."

He predicted, "Until March, all crude oil fundamental information is considered to be reflected, so oil prices will still fluctuate within a box range of $70 to $78 per barrel," and added, "Short-term fluctuations will be determined by the development of the Middle East war."

However, from the second quarter, excess demand for crude oil is expected to intensify. Researcher Park diagnosed, "The influence of OPEC's decisions will gradually become stronger than that of the U.S.," but "If prices surge sharply, OPEC+ is likely to adjust production due to concerns about a slowdown in crude oil demand, making the possibility of rising above $90 low."