Khaberni - J.P. Morgan's forecasts have entered a more pessimistic realm concerning the future of oil prices in the upcoming years.
The American bank reckons that the price of standard Brent crude might drop to $30 per barrel by 2027, due to an abundance of supply and potential market flooding, according to a recent report.
According to Reuters, the bank expects Brent crude to reach about $57 per barrel in 2027, while the price of West Texas Intermediate (WTI) is likely to hit $53 in the same year.
Meanwhile, the bank has maintained its price estimates for 2026 unchanged at $58 for Brent and $54 for West Texas.
Simultaneously, the bank's estimates suggest continued growth in global oil demand, expected to increase by 0.9 million barrels per day in 2025, reaching 105.5 million barrels per day. The bank also anticipates similar increases during 2026, with demand accelerating in 2027 by an increase of 1.2 million barrels per day.
According to the memo, J.P. Morgan anticipates global crude supply to surpass demand levels in the coming years, as supply is expected to grow at a rate three times the rate of demand growth in 2025 and 2026, before falling to about a third of this rate in 2027.
The bank estimates that half of the increase in supplies will come from producers outside the OPEC+ alliance, driven by massive offshore projects, alongside continued growth in global shale oil production.
OPEC+, which includes OPEC members, Russia, and other producing countries, has increased its production since April last year, a move that contributed to an increase in global supply.
Major producers such as the United States and Brazil have also continued to boost production levels, further compounding fears of a supply glut and putting pressure on prices in global markets.
Despite the pessimistic outlook for prices, J.P. Morgan believes that keeping demand growth within the range of 0.8 to 1.3 million barrels per day will be sufficient to maintain market balance over the next two years, provided OPEC+ continues to stabilize production levels without major changes.
The bank added that this scenario of slowing demand and increasing supply remains the most influential factor on future price directions, enhancing the likelihood of oil price falls to levels not seen in the market for years.
