Brent Oil: Higher prices to extend into 2027 – Deutsche Bank
Deutsche Bank’s Henry Allen and Jim Reid highlight that Brent Oil has surged again, with spot prices above $107 per barrel and December 2027 futures at new highs.
Deutsche Bank analysts Henry Allen and Jim Reid report that Brent oil prices have reached new highs, with spot prices exceeding $107 per barrel and December 2027 futures at record levels. They attribute this surge to stalled US–Iran diplomacy, doubts about the Strait of Hormuz reopening, and growing market expectations of prolonged high oil prices into 2027.
The bond market has also been actively selling off, with yields rising as oil prices climb. Initially, President Trump's rejection of Iran's proposal triggered the price increase, with Brent crude climbing 0.92% to $105.28 per barrel on Friday and further increasing to $107.30 per barrel on Monday. The December 2027 Brent future surpassed its previous high of $80.29 per barrel, now trading at $80.67 per barrel.
Markets are pricing a longer period of high oil prices into 2027, not just front-end prices. This situation is driven by the lack of progress in US-Iran negotiations and skepticism regarding a soon reopening of the Strait of Hormuz, leading investors to anticipate sustained high oil prices.
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