(Bloomberg) —

• Significantly lower OPEC supply and higher demand to more than offset higher US production
• “Overall, we believe that OPEC will be able to sustain Brent in an $80-$105 range in 2024 by leveraging robust Asia-centric global demand growth (1.8m b/d) and by exercising its pricing power assertively”
• Saudi Arabia is expected to unwind its extra 1m b/d cut gradually starting in 2Q, but the 1.7m b/d reduction with 8 other OPEC+ nations is seen remaining fully in place in 2024
• Most of rally in prices is likely over; Brent is unlikely to exceed $105/bbl next year for sustained periods
• Benchmark is also unlikely to trade for long below $80/bbl in 2024
• Bank recommends clients go long $90-95/bbl Brent call spread and short $80/$100 Brent strangle on the June 2024 contracts