J.P. Morgan on Wednesday lowered its second-half 2026 Brent crude oil price forecast due to lower-than-expected OECD commercial inventory draws and lower demand for oil.
The bank sees Brent averaging $86 per barrel in the third quarter, $80 in the last quarter, and expects to exit 2026 at $78, according to a research note.
* J.P. Morgan said OECD commercial inventories draws have come in below expectations, while demand losses have been larger than expected, implying materially less upward pressure on oil prices.
* The bank said the market has rebalanced through a meaningfully different mix of demand losses and inventory withdrawals than it initially assumed.
* J.P. Morgan said oil flows are currently running at roughly 8.6 million barrels per day (bpd) and have averaged 6.3 mbd so far in June, materially above April and May levels.
* The bank said private operators have largely refused to draw down oil stocks, relying almost entirely on the government SPR releases to keep refinery gates open.
* J.P. Morgan said in its second-half forecast, it expects OECD inventories to continue to draw by an additional 50 million barrels between April and July.
* The bank said given the scale of the projected oversupply in 4Q26 and 1H27, production would likely need to be curtailed in early 2027, following a period of maximized output in late 2026.
* It also said that the market will enter 2027 with a constructive outlook on supply growth from Venezuela and Iran, alongside expected increases from Brazil, Guyana, Argentina, Canada, and the United States.
