us-eia-forecasts-higher-output-lower-oil-prices-a-tug-of-war-with-middle-east-riskA · FULL TRANSLATION
- JETRO: the US EIA forecasts higher oil output and lower prices
- Meanwhile the Strait of Hormuz still faces risk of renewed ship attacks
- Supply-growth expectations and geopolitical risk are pulling oil prices both ways
Per JETRO, the US EIA forecasts higher oil output and lower prices, even as the Strait of Hormuz still faces renewed attack risk. That's the current tug-of-war: rising supply and soft demand pulling prices down, Middle East risk ready to push them up. For import-dependent Japan and anyone watching inflation and FX, which force wins directly moves import costs, prices and the yen. Rather than guess a price level, watch the relative strength of these two variables.
JETRO reports that the U.S. Energy Information Administration (EIA) has issued a new forecast predicting increased oil production and lower prices; however, there remains a risk of ship attacks in the Strait of Hormuz. This highlights the current tug-of-war in the international oil market: supply increases and flat demand are pulling down prices, while Middle Eastern regional risks could push them up. For Japan, which heavily relies on imported crude oil, and investors watching inflation and exchange rates, which force is stronger directly affects import costs, prices, and the yen. Specific numerical predictions should be referenced from EIA releases and JETRO reports.