Analysts at TD Securities offer a bullish outlook on WTI, in the wake of the OPEC and its allies (OPEC ) oil output cuts and US oil inventory drawdown and a potential increase in Chinese oil demand.

“Despite broad concerns surrounding global economic weakness and a lackluster risk appetite, crude oil continues to hold on to the strong gains made recently as the market focuses on the EIA data showing broad inventory draws and the unexpectedly large OPEC production cuts.”

“The crude complex is pricing a much tighter supply-demand environment for the rest of 2023, putting the previous OPEC statements suggesting a Q2 surplus, and demand concerns amid the evolving bank crisis, in the rearview mirror.”

“Notwithstanding pending economic weakness in the Western world, we judge that the combination of OPEC cuts, low US petroleum complex inventory levels and the upcoming sharp increase in Chinese demand will send WTI into $90 territory in the second half of the year, with Brent not far off the triple digit mark.”