Big banks lower crude price forecast
June 30, 2026
There are several big investment banks revising down their crude price forecast as it appears the world has done a better job than anyone expected dealing with the disruptions out of the Middle East caused by the war. Global inventories are low and this is a concern, but many market participants seem to just look past this and see ample supplies on strong production.
Citi cut its Brent oil price forecast for Q3 down to $75 per barrel from $110 and dropped its 2027 forecast to $65 from $80. Citi said the oil market could be oversupplied next year by as much a 4 million barrels per day, which could keep prices below $70.
JPMorgan sharply reduced its oil price forecast last Friday. Its Q3 target dropped to $86 from $104, its Q4 target dropped to $80 from $98, and its 2027 target dropped to $64 per barrel from $75. JPMorgan analyst Nataha Kaneva cited greater demand destruction than initially assumed and earlier-than-expected Strait of Hormuz shipments as a reason for the downgrade.
Research firm Wood Mackenzie reduced its 2027 oil price forecast to $78, even though it does not expect Middle East oil operations to return fully to normal for the better part of a year.
BNP Paribas heads of commodity strategy Also Spanjer maintained a year-end Brent target of $80 per barrel, arguing that additional supply could be absorbed by buyers looking to rebuild depleted inventories. Spanjer said he sees oil trading in a $75 to $85 range in 2027 once inventories have been rebuilt.
What has driven all these companies to revise their forecast? WTI crude oil is about ready to close in the second quarter as the weakest quarter since 2020, down 19% on the month, with Brent tracking a similar slide. The war premium is now gone as crude sits roughly at the same price prior to the start of the war. The biggest surprise creating these outlooks is that supply has come back faster than almost anyone suspected.