2026 Oil Outlook

Our call as the year began for Brent to trade in a range between $60 and $80 was almost perfect. The problem is it fell to the bottom of the range and has been languishing. So we were wrong to expect that energy stocks would outperform the broader market, with the notable exception of refiners. Now sentiment for oil is probably at unsustainably pessimistic levels, with unrealistic expectations both for slow demand growth and for excessive supply growth. The abandonment worldwide of dreams for a battery-electric fleet, the rolling back of US fuel efficiency requirements and diesel appetite from hyperscaler datacenters will surely cause demand to surprise on the upside. Outside the Americas, there is little feasible opportunity for supply growth other than the spare capacity if a few OPEC nations who have little incentive to see lower prices. We reiterate our forecast for a $60 to $80 trading range, which from here, is tantamount to calling the bottom.