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Informist, Tuesday, Sept. 9, 2025

 

MUMBAI – Commerzbank has revised downward its price forecast for Brent crude oil to $65 per barrel for 2026 from its earlier projection of $70 per barrel, due to rising downside risks from increase in production from the Organization of the Petroleum Exporting Countries and its allies. Prices of West Texas Intermediate crude oil are expected to trade at $62 per barrel in 2026, down from $67 per barrel forecast earlier, it said.

 

However, the German bank has not changed its outlook for oil prices for the end of this year due to risks to supply stemming from the war in Ukraine and sanctions by western countries on Russia. Brent crude oil is seen at $65 per barrel at the end of 2025. "Depending on the news situation, there may be significant deviations from the forecast in either direction in the meantime," Commerzbank said.

 

Eight member countries of OPEC and its allies agreed to implement a production hike of 137,000 barrels per day in October, citing steady global economic outlook and healthy market fundamentals, as reflected in the low oil inventories. This marks the start of the second round of the reversal of voluntary production cuts which were announced in April 2023 and were supposed to remain till the end of 2026. "Experience in recent months shows that this increase is unlikely to be the only one. More increases are expected to follow in the coming months, barring any unforeseen circumstances that might cause the group to reconsider its decision," Carsten Fritsch, commodity analyst at Commerzbank, said in the report.

 

The reasons cited for the increase in supply such as steady economic outlook, healthy fundamentals, and low oil inventories may be true right now in view of oil stocks in OECD countries, but "this is a look in the rear-view mirror," Fritsch said. "The already considerable oversupply in the oil market, estimated at more than 2 million barrels per day in the fourth quarter of 2025 and the first half of 2026, could become even larger due to the continued expansion of OPEC+ (OPEC and allies) production, leading to a further build-up of stocks," Fritsch added.

 

Crude oil prices have not fallen significantly primarily due to the recent increase in supply risks. Ukrainian drone attacks on Russian energy infrastructure threaten to cause disruptions in Russian oil supplies. Additionally, the US could tighten sanctions against Russia and buyers of Russian oil if no settlement is reached in the war against Ukraine in the foreseeable future, Fritsch said.

 

At 1606 IST, the price of Brent crude on the Intercontinental Exchange was $66.12 per barrel and the price of WTI crude on the New York Mercantile Exchange was $62.70 per barrel.  End

 

US$1 = INR 88.10

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Ashutosh Pati

Edited by Nishant Maher

 

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