Sell-off in oil markets has gone too far

The sharp fall in oil prices over the past week shows that fears of a US recession have so far outweighed concerns about conflict in the Middle East. But we think that oil prices have fallen too far, and will rise back to $80pb by the end of the year. After all, our base case is that a recession in the US will be avoided, and more stimulus in China should support oil demand. What’s more, if prices stay low, OPEC+ would probably delay its plans to increase oil output from October.