On November 24th, J.P. Morgan released a forecast report indicating that, hit hard by the problem of over supply in the market, the price of Brent crude, the benchmark for international crude oil, may drop to over $30 per barrel by 2027.
J.P. Morgan stated that Brent crude oil prices have fallen by a cumulative 14% since the start of this year, and the stood at $62.59 per barrel in the morning session on November 24th. Currently, the oil market is closely awaiting news regarding the resumption of the Ukraine peace talks. Analysts point out that if peace is achieved in Ukraine, some sanctions and restrictive measures against Russia are expected to eased, which will also exert downward pressure on energy prices and push oil prices to break below the $40 per barrel mark.
However, despite market concerns crude oil oversupply, analysts and major investment banks except J.P. Morgan Chase believe that even though the Organization of the Petroleum Exporting Countries and its allies (OPEC +) and non-OPEC oil-producing countries in the Americas continue to supply large volumes of oil, leading to a short term decline in oil prices, the price will not break below the $40 per barrel mark.
Previously, Goldman Sachs Group predicted that due to a significant market surplus, oil prices would fall further next year from current levels, with the average price of West Texas Intermediate (WTI) crude, the U.S. benchmark crude oil, likely to reach $53 per barrel in 2026. Daan Struyven, co-head of Goldman Sachs' Global Commodity Research at , stated that the bank judges oil prices to trend continuously downward next year, and recommended that investors should short crude oil at present. Goldman Sachs forecast that the daily crude oil surplus in the market will reach 2 million barrels in 2026, while pointing out that 2026 will be the final year for the current round of large-scale crude oil supply shocks to the market.
