- JP Morgan predicts the international crude benchmark, Brent, could drop into the $30s per barrel by 2027 due to an overwhelming market oversupply.
- Goldman Sachs forecasts the U.S. benchmark WTI Crude will average $53 per barrel in 2026 amid a 2 million bpd surplus and advises investors to short oil right now.
- The oil market is expected to rebalance in 2027 after the current large supply wave, including output from OPEC+ and non-OPEC producers in the Americas, works through the system.
The international crude benchmark, Brent, could dip to the $30s per barrel handle by 2027 as oversupply could overwhelm the market, according to a JP Morgan forecast posted by users on X.
Brent Crude prices have dropped by 14% year to date, and traded relatively stable at $62.59 per barrel early on Monday, as the oil market awaits news from the renewed negotiations on peace in Ukraine.
The U.S. and Ukraine held on Sunday in Geneva what the two sides described as “highly productive” talks and agreed to continue intensive work on a “refined” peace plan, which the U.S. first proposed last week.
Despite the fears of a glut, analysts and investment banks don’t see oil prices moving down to $40 or below, even as oil is set to decline in the near term with strong supply from OPEC+ and the non-OPEC producers in the Americas.
Peace in Ukraine could also weigh on energy prices as some sanctions and restrictions on Russia could be eased, analysts say.
Oil prices are set to further drop into next year from current levels amid a large surplus on the market, with the U.S. benchmark WTI Crude expected to average $53 per barrel in 2026, according to Goldman Sachs.
The investment bank’s call for next year is that oil prices are on track for further declines and investors should short oil right now, Daan Struyven, co-head of global commodities research at Goldman Sachs, told CNBC last week.
The surplus next year will be 2 million bpd on average, Goldman reckons, but notes that 2026 will be the last year of the current big supply wave hitting the market.
The oil market is set to rebalance in 2027 as 2026 will see “the last big oil supply wave the market has to work through,” Goldman’s Struyven added.
