JP Morgan cuts H2FY26 brent forecast, sees year-end price at $78

June 25, 2026 (MLN): JP Morgan has lowered its Brent crude oil price forecast for the second half of 2026, pointing to weaker-than-anticipated inventory drawdowns and larger-than-expected demand losses as key drivers behind the revision.

The US investment bank now sees Brent averaging $86 per barrel in the third quarter and $80 in the fourth, with prices projected to exit 2026 at $78 per barrel.

The bank said OECD commercial inventory draws have come in below initial expectations, while demand losses have been more pronounced than modelled  together implying materially less upward pressure on oil prices.

JP Morgan noted the market has rebalanced through a meaningfully different combination of demand erosion and inventory movements than it originally anticipated.

On the supply side, oil flows are currently running at approximately 8.6 million barrels per day (bpd), having averaged around 6.3 mbd so far in June levels that are materially above those recorded in April and May.

The bank noted that private operators have largely refrained from drawing down their own oil stocks, instead relying almost entirely on government strategic petroleum reserve (SPR) releases to keep refinery gates open.

For the remainder of H2, JP Morgan expects OECD inventories to draw down by an additional 50 million barrels between April and July.

However, it cautioned that given the scale of projected oversupply expected in Q4 2026 and the first half of 2027, production curtailments would likely become necessary in early 2027, following a period of maximized output in the closing months of this year.

Looking further out, the bank said the market is poised to enter 2027 with a constructive supply outlook.

Output growth is expected from a broad range of producers, including Venezuela, Iran, Brazil, Guyana, Argentina, Canada, and the United States, which could add further downward pressure on prices if demand recovery remains subdued.

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