Oil is caught in a tug of conflict, Naeem Aslam, Chief Market Analyst at Zaye Capital Markets, stated in a remark despatched to Rigzone on Monday.
“Geopolitics are including quick time period volatility and maintaining costs supported, however persistent oversupply, rising inventories, and weakening demand alerts are capping any actual upside,” Aslam stated within the assertion.
“Except there’s a significant provide shock, crude is more likely to keep vary certain across the low $60s somewhat than break greater,” Aslam added.
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A BofA International Analysis report despatched to Rigzone on December 18 famous that Brent broke beneath $60 per barrel that week “on information that China crude oil inventories continued to balloon in the course of the previous week, although a lot of the oil is probably going set to enter strategic storage”.
“The fact is that crude oil costs have been falling since OPEC+ introduced a return of idle manufacturing in June 2024, as incremental volumes have exacerbated an already-sluggish market setting for crude oil,” the BofA report acknowledged.
“Whereas close to dated crude oil costs have come down considerably, lengthy dated costs have solely fallen by just a few {dollars},” it added.
That report went on to state that “a worldwide projected surplus of two million barrels per day signifies that crude oil costs ought to common considerably much less in 2026 than they did in 2025”.
“Heading into subsequent yr, we stay solely considerably bearish on costs regardless of the massive projected surplus, as we don’t imagine it’s in OPEC’s self-interest to drive Brent beneath $50 per barrel,” the report famous.
The report went on to challenge that the Brent worth will common about $60 per barrel subsequent yr “in comparison with virtually $69 per barrel this yr”.
In an announcement despatched to Rigzone by the Enverus crew on December 16, Enverus subsidiary Enverus Intelligence Analysis (EIR) projected that the Brent worth will common $55 per barrel in 2026. In keeping with the assertion, EIR sees the Brent worth rising from a median of $50 per barrel within the first half of subsequent yr to a median of $60 within the second half.
“EIR initiatives oil costs will weaken in 2026, with Brent crude anticipated to common $55 per barrel,” EIR famous in that assertion.
“Close to time period oil worth strain displays international stock ranges approaching highs final seen in the course of the pandemic and the shale worth conflict,” it added.
EIR outlined within the assertion that it “adopts a bullish stance” past 2026.
“OPEC-12 liquids output is close to historic highs and will faucet untested spare capability in coming years, whereas long run oil demand projections have strengthened,” EIR stated within the assertion.
“On the identical time, international oil and fuel provide initiatives are declining as a result of underinvestment – setting the stage for tighter balances and better costs later within the decade,” it added.
Within the assertion, EIR Director Al Salazar stated, “our evaluation exhibits that whereas quick time period pressures will weigh on oil and fuel costs, each markets change into provide quick put up 2026”.
“This could pave the way in which for renewed bullish momentum by means of the remainder of the last decade,” he added.
A report despatched to Rigzone by the Macquarie crew on December 5 confirmed that Macquarie was projecting that the Brent worth will common $68.21 per barrel total in 2025 and $60.75 per barrel total in 2026.
In keeping with its December quick time period vitality outlook (STEO), which was launched on December 9, the U.S. Vitality Info Administration (EIA) sees the Brent spot worth averaging $68.91 per barrel this yr and $55.08 per barrel subsequent yr. In its earlier STEO, which was launched in November, the EIA projected that the Brent spot worth would common $68.76 per barrel in 2025 and $54.92 per barrel in 2026.
To contact the creator, e-mail andreas.exarheas@rigzone.com
