UBS raises oil price forecasts for the next three quarters
In a note to clients, UBS has raised its oil price forecasts for the next three quarters, citing a tightening market, persistent risks to supply flows and shrinking inventory buffers. Strategist Giovanni Staunovo told investors that the bank now expects Brent crude to trade at $95 a barrel by year-end, up from $85 previously, and ...
UBS has revised its forecasts for oil prices in the coming three quarters, indicating a tightening market, risks to supply flows, and dwindling inventory buffers. Strategist Giovanni Staunovo informed investors that the bank now anticipates Brent crude to reach $95 a barrel by year-end, up from the previous estimate of $85, and $85 by mid-2027.
The March 2027 forecast has been raised to $90 a barrel from $80, while the September 2027 forecast remains unchanged at $80. UBS still factors in a $4 discount for West Texas Intermediate relative to Brent. Brent oil prices have recently surged past $100 a barrel, with inventory data still pointing to an undersupplied market. Staunovo revealed that global crude exports fell by 150 million barrels in the past two months, driven by lower Middle Eastern, Russian, Mexican, North Sea, and Brazilian exports.
He attributes the ongoing risks to higher prices to strikes on Saudi energy facilities and threats from Iranian officials. "In the near term, we believe risks to prices remain skewed to the upside," Staunovo wrote. Despite the spot price surpassing its year-end target, UBS's forecasts remain higher than market pricing due to the downward-sloping futures curve.
The strategist retains a moderately constructive outlook for crude oil, acknowledging that uncertainty persists due to the Middle East conflict and the pace of recovery in Gulf production and demand.
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