In a report despatched to Rigzone not too long ago, Normal Chartered Financial institution Power Analysis Head Emily Ashford outlined that Normal Chartered expects oil market sentiment “to steadily flip extra optimistic”.
“We count on [crude oil] market sentiment to steadily flip extra optimistic because the bearish oversupply narrative so prevalent in H2-2025 weakens, and merchants flip their consideration to a extra optimistic H2-2026,” Ashford said within the report.
“We count on the provision glut estimates of the primary market commentators to be revised in direction of extra seasonal norms, though costs are prone to stay within the low to mid $60s per barrel,” Ashford added.
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Ashford additionally outlined within the report that Normal Chartered expects “an uptick in volatility and growing give attention to dangers to each provide and demand”.
The Normal Chartered Financial institution Power Analysis Head went on to notice within the report that “low costs have begun to quash U.S. shale output development” and added that, “if OPEC+’s gradual return of barrels recommences in Q2-2026, this may begin to spotlight the tightness and geographic focus of spare capability, which ought to be value supportive within the medium time period”.
Within the U.S. Power Info Administration’s (EIA) newest quick time period power outlook, which was launched earlier this month, the EIA projected that Decrease 48 States crude oil manufacturing, together with lease condensate and excluding the Gulf of America, will drop from 11.28 million barrels per day in 2025 to 11.11 million barrels per day this yr. Complete U.S. crude oil output, together with lease condensate, is forecast within the STEO to drop from 13.61 million barrels per day in 2025 to 13.59 million barrels per day in 2026.
An announcement posted on OPEC’s web site on January 4 revealed that, in a gathering held that day, Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman “reaffirmed their choice on 2 November 2025 to pause manufacturing increments in February and March 2026 on account of seasonality”.
Demand Estimates, SC Webinar
Within the Normal Chartered report, Ashford additionally outlined that Normal Chartered sees “the potential for enhancements in international demand estimates, notably in China and the U.S., alongside fiscal stimulus, following 12 months of aggressive easing cycles”.
Ashford went on to disclose within the report that 55 p.c of members in Normal Chartered’s webinar on oil’s prospects this yr deemed the commodity to have “probably the most draw back threat”.
“The negativity of members in our webinar in direction of oil’s prospects in 2026 was considerably stunning,” Ashford mentioned within the report.
“Expectations of overwhelmed storage pushed by an unprecedent provide glut haven’t materialized, and we count on merchants to recalibrate their expectations over the subsequent few weeks,” Ashford added.
“Interventionist U.S. coverage has added vital uncertainty to geopolitical threat … components similar to slowing U.S. provide development and tighter OPEC spare capability ought to be value supportive within the medium time period,” Ashford continued.
The Normal Chartered report projected that the ICE Brent close by future crude oil value will common $63.50 per barrel in 2026 and $67.00 per barrel in 2027. This commodity averaged $68.50 per barrel in 2025, the report confirmed.
A quarterly breakdown included within the Normal Chartered report forecast the ICE Brent close by future crude oil value will common $62.00 per barrel within the first quarter of 2026, $63.00 per barrel within the second quarter, $64.00 per barrel within the third quarter, $64.50 per barrel within the fourth quarter, and $66.50 per barrel within the first quarter of 2027.
International Surplus
In a report despatched to Rigzone on Monday by the Skandinaviska Enskilda Banken AB (SEB) staff, SEB Chief Commodities Analyst Bjarne Schieldrop warned that “the latest rally in Brent crude just isn’t a sign from the oil market that the a lot mentioned international surplus has been known as off”.
“If we take a look at the form of the Brent crude oil curve it’s at the moment closely front-end backwardated with the curve sloping upwards in contango thereafter. It alerts front-end tightness or close to time period geopolitical threat premium adopted by surplus,” he mentioned.
“If the market had known as off the views of a surplus, then the entire Brent ahead curve would have been a lot flatter and with out the intermediate deep dip within the curve,” he added.
“The form of the Brent curve is telling us that the market is anxious proper now for what may occur in Iran, nevertheless it nonetheless maintains an general view of surplus and inventory constructing except OPEC+ cuts again on provide,” he continued.
To contact the creator, e-mail andreas.exarheas@rigzone.com
