UBS Boosts Oil Price Forecasts Amid Tightening Market

UBS has raised its oil price forecasts for the next three quarters due to a tightening market and shrinking inventory buffers.

The bank now expects Brent crude oil to trade at $95 a barrel by year-end, up from $85 previously, and at $85 by the middle of 2027, according to strategist Giovanni Staunovo. He noted that oil has climbed in recent weeks, topping $100 a barrel today.

The under-supplied market is driven by lower global crude exports in August from key regions such as the Middle East, Russia, Mexico, the North Sea, and Brazil, resulting in 150 million barrels less inventory over the past two months. Staunovo highlighted strikes on Saudi energy facilities and threats from Iranian officials as signs that risks remain tilted higher.

Although UBS' forecasts sit above market pricing due to a downward-sloping futures curve, the bank retains a moderately constructive outlook for oil prices.