Even JPMorgan Doesn’t Know Where Oil Goes Next

Oil has entered a market where even the usual forecasting models are becoming harder to rely on.

JPMorgan analysts say the path for crude prices is increasingly difficult to predict as the Middle East conflict drags on. Several thresholds the bank previously viewed as unlikely — including oil above $100 a barrel and sharply

higher US Treasury yields — have already been breached.

The bigger issue is supply. JPMorgan estimates that oil is currently trading around $106 a barrel, well above its estimated September fair value of about $90. The market is already pricing in the risk of further supply losses if disruptions continue.

That makes every new development in the conflict more important for crude. Any sign of a wider or longer-lasting disruption could quickly shift expectations again, while a meaningful improvement in supply conditions could take some of the premium out of prices.

For now, oil is trading on headlines as much as fundamentals — and that can make the next move harder to read.