Key Moments
- J.P. Morgan now expects Brent crude to average $86 per barrel in Q3 2026 and $80 in Q4 2026, ending 2026 at $78.
- Weaker-than-expected OECD inventory draws and larger demand losses have eased upward pressure on prices.
- The bank sees OECD stocks falling by a further 50 million barrels between April and July and flags potential production cuts in early 2027.
Revised Brent Price Projections
Investing.com – J.P. Morgan cut its Brent crude oil price forecast for the second half of 2026 on Wednesday, pointing to softer commercial stock withdrawals and weaker oil demand than it had previously assumed.
The bank’s latest projections call for Brent to average $86 per barrel in the third quarter of 2026 and $80 per barrel in the fourth quarter, with prices seen at $78 by the end of 2026.
| Period | Projected Brent price ($/barrel) |
|---|---|
| Q3 2026 | $86 |
| Q4 2026 | $80 |
| End of 2026 | $78 |
Inventory Dynamics and Demand Weakness
In a research note, J.P. Morgan said that draws on OECD commercial inventories have been smaller than anticipated, while demand losses have surpassed its earlier forecasts. This combination has lessened the upward pressure on crude prices.
The bank highlighted that the market has effectively rebalanced, but through a different mix of demand erosion and inventory usage than it had originally expected.
Oil Flows and Strategic Stock Usage
According to J.P. Morgan, current oil flows are running at around 8.6 million barrels per day and have averaged 6.3 million barrels per day in June so far, a level it described as materially higher than those seen in April and May.
The bank noted that private operators have generally avoided drawing down their own stocks, instead leaning heavily on government Strategic Petroleum Reserve releases to keep refineries running.
Outlook for OECD Stocks and Future Production
Looking ahead, J.P. Morgan expects OECD inventories to decline by an additional 50 million barrels between April and July within its second-half outlook.
Given the anticipated size of the surplus in the fourth quarter of 2026 and the first half of 2027, the bank said that production would probably need to be cut in early 2027, following a period of maximum output in late 2026.
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