Oil prices have endured their worst performance since the pandemic, and Wall Street believes the downturn is far from over. Based on the average forecasts of Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, and Morgan Stanley, Brent crude futures—currently trading around $62 per barrel—are expected to decline further to approximately $59 by 2026. This year, the international benchmark has already fallen by 17%.
The five banks' average projections indicate that the global oil market will face a surplus of about 2.2 million barrels per day next year, as production outpaces demand growth. Their estimated surplus is lower than that of the International Energy Agency (IEA), which predicts a record oversupply of 4 million barrels per day. However, the IEA also notes that adjustments by oil-producing nations could mitigate the scale of the surplus.
Among the five major banks—Goldman Sachs, Citigroup, JPMorgan Chase, Morgan Stanley, and Bank of America—Goldman holds the most pessimistic outlook, forecasting an annual average price of $56 per barrel, while Citigroup is the most optimistic at $62. This divergence marks a shift from their usual stances.
Goldman Sachs argues that oil projects delayed during the pandemic will come online, adding new supply to the market. Citigroup, on the other hand, believes China's ongoing inventory stockpiling will cushion the impact of excess supply on prices. JPMorgan Chase expects the surplus to be smaller than the numbers suggest, as the OPEC+ alliance, led by Saudi Arabia, may reverse course and implement significant production cuts by mid-2025. Meanwhile, Bank of America assumes OPEC+ will resume output increases after a planned pause in the first quarter.
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