Bank of America on Wednesday said that if U.S.-China trade tensions intensify while OPEC+ production ramps up, Brent prices could slip below $50 a barrel.
The bank maintained its Brent forecast at $61 a barrel for the final quarter of 2025 and $64 a barrel for the first half of 2026, citing a likely floor around $55.
“Looking into 2026, we see US crude oil production flatlining, while demand could improve if America moves forward with trade deals over the coming months,” the bank said.
World oil supply is expected to closely match demand next year as the broader OPEC+ group increases production, an OPEC report showed on Monday, a shift from last month’s outlook, which projected a supply shortfall in 2026. OPEC’s demand forecasts are at the higher end of industry estimates.
Meanwhile, the International Energy Agency (IEA) on Tuesday raised its forecast for global oil supply growth this year following OPEC+’s decision to hike production, while lowering its demand growth forecast due to a more challenging economic backdrop.
On the trade front, U.S. President Donald Trump said he was considering terminating some trade ties with China, singling out cooking oil. Both countries began imposing tit-for-tat port fees on Tuesday.
Brent crude futures contracts were trading around $62.48 a barrel on Wednesday, while West Texas Intermediate crude futures contracts were trading at $58.85.
(Reporting by Sherin Elizabeth Varghese and Anushree Mukherjee in Bengaluru)