Oil Price Forecast: Trade Rich to a $60 Glut Anchor as Brent Breaks Above $70

Oil price 2026: WTI (CL=F) and Brent (BZ=F) trade rich to a $60 surplus anchor

Front-month WTI (CL=F) is trading around $65.50 and Brent (BZ=F) near $70.74, while Murban sits at $66.96 after a sharp -4.08% drop. The broader slate shows Louisiana Light at $63.98 (+3.71%), Bonny Light at $78.62 (-2.84%), and the OPEC Basket around $67.00 (+5.51%), with U.S. natural gas at roughly $4.17–$4.18 after a strong daily move of more than +6%. At the same time, a recent survey of thirty-one market analysts places the 2026 Brent average near $62.02 and WTI near $58.72, effectively arguing that the underlying surplus keeps “fair value” close to $60 per barrel even as spot trades well above that level on risk premium.

Spot pricing snapshot and the tension between screens and fundamentals

On the screen, Brent (BZ=F) has already pushed through the psychologically important $70 mark, briefly hitting about $70.50–$70.92, while WTI (CL=F) has held above $65, trading in the $65.17–$65.50 zone. Those levels stand roughly $8–$10 above the average bands implied by the analyst poll for 2026. The strip is telling a different story from today’s prints: spot reflects geopolitical tension and weather-driven outages, while the consensus forecast assumes that once those temporary supports fade, the persistent supply overhang drags prices back toward the high-50s to low-60s.

Analyst consensus: surplus keeps average Brent near $62 and WTI near $59

The January poll of market economists points to Brent at ~$62.02 and WTI at ~$58.72 for the full year, both slightly higher than the previous month’s estimates but still anchored around $60. The core reasoning is straightforward: non-OPEC supply growth, resilient U.S. production and modest demand growth combine to leave the market in surplus for most of 2026. That surplus is expected to dominate once the immediate shock from the latest Middle East flare-up and winter weather fades. In practice, that means spikes above $70 Brent / $65 WTI attract selling, while dips into the low-60s are where physical buyers and value players step in.

Trump–Iran rhetoric: why geopolitics is adding a visible premium to BZ=F and CL=F

The current premium on BZ=F and CL=F starts with Washington and Tehran. The U.S. President has publicly warned of a “massive armada” heading to the Gulf, led by the aircraft carrier Abraham Lincoln, and promised a response with “speed and violence” if necessary. Iran has answered by declaring itself ready to respond “immediately and powerfully” to any aggression. Markets do not need an actual strike to re-price risk. As soon as credible threats appear, traders model scenarios involving disruption to Iranian exports and potential stress in Gulf shipping lanes, and that repricing has been strong enough to push Brent sustainably above $70 for the first time since mid-2025. The key point is that the poll-based $60 average already assumes frequent noise, but the current tape is trading more than noise; it is pricing a non-trivial probability of supply disruption in a region that still matters for marginal barrels.

Venezuela’s legal reset and sanctions relief: medium-term supply, not today’s driver

At the same time, policy is loosening around other heavy-oil suppliers. Venezuela’s Parliament has approved a new hydrocarbons law that dismantles the absolute monopoly of PDVSA and formally opens the upstream to more foreign capital. In parallel, Washington has issued a broad license that effectively lifts most of the previous restrictions on Venezuelan crude exports. Trading houses and majors are already positioning around cargoes and gas projects, with early deals showing renewed flows to U.S. buyers and scope for more volumes to reach the market if structural investment returns. This is not a near-term bearish hammer on CL=F and BZ=F. Incremental Venezuelan supply requires capex, infrastructure rehabilitation and stable legal footing, which makes it a gradual 2027–2030 story. For 2026, the impact is mostly psychological: the market knows that if prices stay too high for too long, new Latin American barrels are waiting in the wings, which reinforces the perception of a long-term cap above the mid-$70s.

Libyan power-sharing by disruption: chronic risk without a lasting cut to flows

Libya remains a structural risk factor but has evolved into a managed equilibrium rather than a constant production disaster. The recent quiet meeting in Paris between representatives of the Tripoli-based government and the eastern power bloc led by Haftar was nominally about “institutional strengthening” of the central bank, the national oil company and budget oversight. In practice it was about revisiting how oil rents are divided. Tripoli’s camp fights to keep control over the central bank, the FX window and approvals that fund militias and contracts, while the eastern side pushes for tolerated access to crude-in-kind deals and alternative channels that siphon off value. Both sides periodically weaponize production or export threats, then step back when the other side overreaches. The pattern keeps Libyan output in play most of the time, with sporadic disruptions that add noise to BZ=F, but the underlying assumption remains that neither camp can afford a prolonged shut-in. For 2026, Libya is a volatility source rather than the core determinant of the oil price trend.

Demand in 2026: weaker gasoline, strong petrochemicals and a plateauing growth curve

Demand projections for 2026 have been revised slightly higher compared to late-2025 but remain well below boom-year trends. Updated agency forecasts now place global oil demand growth around 700,000–900,000 barrels per day, with one major forecast citing roughly 930,000 bpd driven by a rebound in petrochemical feedstock consumption. That is materially weaker than the 1.2–1.5 million bpd annual increases seen in previous cycles. Electrification of transport, especially passenger cars, is eroding gasoline demand growth in China and Europe, while efficiency gains cap consumption in mature markets. The incremental strength is in jet fuel and petrochemicals, not in pure road fuels. This demand pattern justifies a stable but not explosive path for Brent (BZ=F) and WTI (CL=F) in the low-to-mid-$60s if supply behaves, and it also explains why analyst surveys are not chasing targets back toward the old $80–$100 band despite geopolitical risk.

U.S. shale discipline and the Bakken breakeven: why CL=F supply is no longer infinite at $60

The oversupply argument assumes U.S. shale can always flood the market at current prices. The latest signals out of the Bakken and other plays show that the cost structure and corporate incentives have changed. A flagship independent producer has halted drilling in the Bakken for the first time in decades, explicitly citing destroyed margins at current realized prices. The basin’s breakeven is estimated at roughly $58 per barrel, and with WTI (CL=F) oscillating around the mid-$60s but with elevated volatility and a flat forward curve, management sees insufficient compensation for the risk of deploying fresh capital. At the same time, U.S. upstream deal activity remains strong, with Q4 2025 M&A reaching about $23.5 billion, driven by large transactions such as a roughly $7.4 billion asset purchase by a Japanese buyer. Capital is consolidating into larger platforms and focusing on advantaged rock rather than chasing absolute volume. The implication for 2026 is that at $55–$60 CL=F, U.S. supply growth slows sharply, while at $65–$70, growth resumes but under stricter shareholder-return discipline. That dynamic supports the analyst view of a soft ceiling in the low-to-mid-$60s on average, while also limiting downside below the high-$50s because producers simply pull back.

Natural gas shock and LNG build-out: cross-commodity clues for the oil complex

The extreme move in U.S. gas prices during the recent Arctic storm shows how quickly the broader hydrocarbon complex can tighten. Front-month Henry Hub spiked to roughly $7.439 per mmBtu intraday before settling near $6.80, the highest close since April 2023, driven by freeze-offs, infrastructure failures and a surge in heating demand. Gas has since fallen back to about $4.17–$4.18, but the episode forced short sellers to cover and reminded traders that weather shocks can still generate acute energy scarcity. At the same time, the liquefied natural gas segment is in an expansion phase. Global LNG supply is projected to increase by around 40 billion cubic meters in 2026, a jump of more than 7% year-on-year and the fastest growth since 2019. North America is central to this build-out, with U.S. liquefaction capacity expected to rise from roughly 17 Bcf/d at the end of 2025 to more than 19 Bcf/d in 2026. Major projects such as Plaquemines LNG, Corpus Christi Stage 3 and Golden Pass LNG underpin this surge, and over 13 Bcf/d of additional U.S. export capacity is under construction toward 2029. For oil, this context matters in two ways. First, it confirms that capital is flowing aggressively into gas and LNG, while crude supply growth is more constrained. Second, it means that fuel switching and cross-market competition will cap how far CL=F and BZ=F can run before alternative energy sources absorb some demand.

ExxonMobil (XOM): how $60–$70 Brent still prints strong cash flow

The latest results from ExxonMobil (XOM) show how profitable the sector remains at current price levels. For the fourth quarter, Exxon reported earnings excluding special items of $7.3 billion, equivalent to $1.71 per share, marginally beating the $1.70 consensus despite lower year-on-year oil prices and weaker chemicals margins. Full-year 2025 earnings came in at $28.8 billion, down from $33.7 billion in 2024, marking the lowest profit since 2021 but still a very strong outcome in an environment where Brent spent long stretches near or below $70 and WTI near $60–$65. Operationally, Exxon delivered its highest production in over forty years, with full-year output of 4.7 million barrels of oil equivalent per day and fourth-quarter production of 5.0 million boe/d. Its “advantaged” growth engines performed even better, with the Permian averaging around 1.6 million boe/d for the year and hitting about 1.8 million boe/d in Q4, while Guyana moved beyond 700,000 gross barrels per day for the year and approached 875,000 gross barrels per day in the final quarter. Despite weaker prices, the company returned roughly $37.2 billion to shareholders in 2025, split between about $17.2 billion in dividends and $20.0 billion in share repurchases, and it plans to repurchase another $20 billion of stock through 2026 under normal conditions. The signal is blunt: at $60–$70 Brent (BZ=F) and $55–$65 WTI (CL=F), the integrated majors remain cash machines, which discourages them from chasing undisciplined volume growth that would crash the market and undermine their own buyback and dividend programs.

Positioning and the emerging $60–$70 trading corridor for CL=F and BZ=F

Taken together, the analyst survey, geopolitical stress, supply behavior and corporate signals are converging on a $60–$70 corridor for the key benchmarks. On the downside, the combination of Bakken breakevens around $58, disciplined U.S. shale investment and the need for cash flow to finance shareholder returns makes it difficult for WTI (CL=F) to sit comfortably much below the high-$50s without prompting a slowdown in drilling and growth. On the upside, the expectation of a global surplus, the prospect of more Venezuelan barrels once investment ramps, and incremental flows from other producers argue against a sustained move far above the low-$70s for Brent (BZ=F) unless there is a serious physical disruption in the Gulf or another core export region. The present pricing, with BZ=F hovering around $70.50–$70.74 and CL=F close to $65.44–$65.50, reflects the upper half of that band, powered by Trump–Iran rhetoric and Winter Storm Fern’s 500,000 bpd of U.S. supply still offline. As weather normalizes and rhetoric cycles through another phase, some of that premium is likely to bleed out unless a genuine supply shock materializes.

Strategic view on oil: buy, sell or hold at current WTI (CL=F) and Brent (BZ=F) levels

At today’s levels, oil is priced above its 2026 fundamental anchor but not in bubble territory. With Brent (BZ=F) a little over $70 and WTI (CL=F) mid-$60s, the market is charging for geopolitical risk and temporary disruptions on top of a surplus-driven fair value closer to $60–$62 Brent and $58–$59 WTI. The surplus story is backed by demand growth capped below 1 million bpd, accelerating electrification and rising non-OPEC supply, while the floor is enforced by shale breakevens and capital discipline in basins like the Bakken. From a directional standpoint, this skew argues that the risk-reward now leans mildly bearish on a six- to twelve-month horizon, with more room for prices to drift back toward the low-60s than to sustain a decisive breakout into the high-70s without a major supply shock. That points to a “hold to slight sell” bias at current levels for broad exposure to CL=F and BZ=F if the strategy is based purely on the given data. Traders who bought the late-2025 dip into the high-50s to low-60s are now sitting on gains that are largely risk-premium-driven. Locking in part of those gains or tightening risk around existing long positions fits the factual backdrop of a market where oversupply remains the base case and geopolitics explains most of the stretch above $60.

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