Oil prices are likely to dip below $60 per barrel next year, according to a range of recent forecasts from major investment banks.
For 2026, both Brent Crude and WTI Crude are expected to retreat from current levels of about $63 and $60 per barrel, respectively, as an oversupply builds up and outpaces demand, according to market analysts.
Geopolitics will still influence prices, with attention focusing on Venezuela, Russia, and Iran throughout the year.
Even with ongoing geopolitical uncertainties, the U.S. Energy Information Administration (EIA) and several Wall Street banks remain cautious about oil, projecting averages under $60 per barrel for 2026.
In its latest Short-Term Energy Outlook (STEO), the EIA predicts global oil inventories will keep rising through 2026, applying downward pressure on prices in the near term. The forecast sees Brent averaging about $54 per barrel in Q1 2026 and roughly $55 for the full year, though this year’s Brent projection is $3 higher than last month’s outlook due to Chinese stockpiling and tougher sanctions on Russia.
The EIA explains two key shifts: first, ongoing Chinese oil purchases for strategic reserves may push prices higher than previously expected; second, renewed sanctions on Russia could curb Russian oil output next year beyond earlier projections.
Macquarie Group also anticipates lower prices, noting that sanctions on Russia, ambiguity around Venezuela, and winter weather in the U.S. could slow how quickly prices fall.
Macquarie’s teams argue that OPEC+ would likely need to enact production cuts in the latter half of 2026 to stabilize the market amid an anticipated price drop, according to their latest quarterly forecast reported by World Oil.
ABN AMRO Bank, in its Energy Market Outlook 2026, points to a persistently oversupplied market driven by soft global demand growth and rising supplies from OPEC+ and non-OPEC producers. China’s stockpiling and geopolitical uncertainties have kept prices from collapsing, according to Moutaz Altaghlibi, senior energy economist at ABN AMRO.
“Overall, we expect the glut—driven by weaker demand and increasing supply—to linger through 2026, with its downward pressure gradually pushing crude prices lower,” Altaghlibi notes.
ABN AMRO’s forecast for Brent calls for an average of about $58 in Q1 2026, declining to around $52 as the glut intensifies, and finishing the year near $50, for a yearly average near $55.
Ole Hvalbye, commodities analyst at SEB, commented that the path of least resistance remains downward-biased, even as rising tensions between Washington and Caracas add a small geopolitical premium that isn’t enough to offset the broad bearish trend from growing supply.
Most other banks and analysts share the view that the market will be dominated by excess supply in the coming year.
A Reuters poll taken late November showed expectations for WTI to average under $60 in 2026, with Brent anticipated to average around $62 for the year, down from prior estimates.
Goldman Sachs projects a sizable surplus, with WTI expected to average about $53 in 2026.
Looking ahead, Goldman Sachs’ Daan Struyven indicated that the market should rebalance in 2027, describing 2026 as the year to absorb the last major wave of oil supply.
Even as the fundamentals suggest softer oil prices next year, potential geopolitical shocks—from Russia and Venezuela—could still jolt markets.
Some scenarios include a disruption to Venezuelan oil production, which would force the market to replace heavy crude exports from Caracas. If that supply tightens, the Dubai benchmark could strengthen relative to ICE Brent as buyers seek to compensate for the loss of Venezuelan barrels, according to Rystad Energy’s analysis cited by industry observers.
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