UBS on Thursday raised its forecast for Brent crude prices, expecting oil to remain elevated in the coming months as Middle Eastern supply stays vulnerable to disruptions amid geopolitical uncertainty.
* The bank now expects Brent crude to trade at $110 a barrel by the end of 2026, up from its previous forecast of $100.
* UBS raised its Brent forecast for March 2027 to $95 per barrel from $90, for June 2027 to $90 from $85 and for September 2027 to $85 from $80
* “Uncertainty around our forecasts remains elevated, reflecting the unpredictable nature of the Middle East conflict, and the pace of recovery in Gulf production and global oil demand,” the bank said in a note
* Middle Eastern crude loadings have recovered substantially from the severe disruption earlier this year, UBS said, but added that Gulf countries’ crude and condensate port loadings remain below pre-conflict levels
* The bank also noted that October saw a record number of reported attacks on vessels in and around the Strait of Hormuz, raising insurance and shipping costs
* Elevated shipping costs are supporting Brent prices, UBS said; Middle East-to-China very large crude carrier rates have jumped to $30-$40 a barrel from $1-$3 over the past decade due to longer voyages and tighter tanker availability
* Oil prices rose more than 1% on Wednesday, with Brent crude climbing above $115 a barrel, after an attack on a Saudi refinery
(Reporting by Sherin Sans and Anushree Mukherjee in Bengaluru)