SunSirs:Multiple Institutions Forecast: 2026 Crude Oil Average Price Below $60

According to China Chemical News, most investment banks and the U.S. Energy Information Administration (EIA) predict that average oil prices in 2026 will fall below $60 per barrel due to persistent oversupply. This is primarily driven by weak global demand growth and increased supply from OPEC+ and non-OPEC+ producers.

The EIA's latest Short-Term Energy Outlook projects continued global oil inventory growth in 2026. It forecasts the first-quarter average price of Brent crude at $54 per barrel and the full-year average at $55 per barrel—a $3 increase from last month's projection—attributed to China's strategic reserve purchases and intensified sanctions on Russian oil. However, market fundamentals persistently cast a pessimistic outlook on next year's oil prices.

Macquarie Group anticipates lower oil prices next year, though sanctions against Russia, the situation in Venezuela, and cold winter weather in the U.S. may slow the decline. OPEC+ may need to cut production in the second half of 2026 to stabilize the market. ABN AMRO Bank noted that weak crude demand and rising supply have created oversupply. While China's reserve purchases and geopolitical uncertainties have prevented a sharp oil price decline, the surplus is expected to persist through 2026. It forecasts Brent crude at $58 per barrel in Q1, $52 by mid-year, and $50 by year-end, with an annual average of $55. SEB Bank believes the downward trend in oil prices is evident, as the geopolitical premium stemming from tensions in Venezuela struggles to offset the bearish backdrop of rising supply and oversupply.

A late-November Reuters survey indicates that oversupply will be the key factor in the 2026 crude oil market. The U.S. benchmark price may fall below $60, with WTI averaging $59 and Brent at $62.23 (down from $63.15 in October). Goldman Sachs forecasts an even lower WTI average of $53, calling 2026 “the year to digest the final wave of massive supply.” with the market potentially returning to balance in 2027.

Additionally, developments in Venezuela, Russia, and Iran are viewed as significant geopolitical factors. Should U.S. military intervention in Venezuela disrupt its heavy crude production, it would substantially impact global benchmark oil prices, widening the spread between Dubai benchmark crude and Brent crude.

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