If Brent prices hover around $50, many oil producers might struggle to provide the attractive capital returns that have pulled some investors back to the sector.
Goldman Sachs analysts have projected that Brent crude oil prices could slump to the low $50s due to a significant increase in global oil supplies.
“We expect the oil surplus to widen and average 1.8 million barrels per day in 2025 Q4 (through) 2026 Q4, resulting in a nearly 800 million barrel rise in global stocks by end-2026,” the bank’s analysts said in a statement, according to a Reuters News report.
The investment bank believes that stockpiles in Organisation for Economic Co-operation and Development (OECD) member countries will comprise a third of the total global stock, or 270 million barrels, by 2026. This, alongside reduced demand, will slash Brent’s fair value from the current mid-$70s.
Retail sentiment on Stocktwits about ProShares Ultra Bloomberg Crude Oil (UCO) and the United States Oil Fund (USO) was in the ‘bearish’ territory at the time of writing.
Oil prices have come under pressure this year amid uncertainty about economic growth, driven by Trump’s tariffs and a rise in production from OPEC+ countries. For 2026, the International Energy Agency projects that the higher OPEC+ targets announced in September will help boost global oil supply growth by 1.9 million barrels per day, while oil demand is expected to rise by only 700,000 bpd.
If Brent prices hover around $50, it would put pressure on oil producers worldwide, and many firms might struggle to provide the attractive capital returns that have pulled investors back to the sector.
Brent crude prices stood at around $67 per barrel at 4.57 a.m. ET, while U.S. West Texas Intermediate crude prices fell to around $63 per barrel.
Investors are awaiting further developments in the war in Ukraine, as well as U.S. crude inventory data, which is due later on Wednesday. An American Petroleum Institute survey revealed that crude oil stocks declined last week.
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