J.P. Morgan lowered its Brent crude oil price forecast for the second half of 2026 on Wednesday. The bank cited weaker-than-expected inventory withdrawals and softer global oil demand.
J.P. Morgan Cuts Brent Oil Price Forecast
J.P. Morgan now expects Brent crude to average $86 per barrel during the third quarter of 2026.
The bank projects an average price of $80 per barrel in the fourth quarter. It also expects Brent oil prices to fall to approximately $78 per barrel by the end of 2026.
Weaker Demand Limits Oil Price Growth
According to the bank, commercial oil inventory withdrawals across OECD countries have remained below earlier expectations.
At the same time, oil demand losses have been greater than analysts initially forecast. This combination has reduced the upward pressure on Brent crude prices.
J.P. Morgan explained that the oil market has rebalanced differently than previously expected. The change reflects a new combination of weaker demand and lower inventory withdrawals.
Oil Flows Increase During June
Oil flows are currently running at around 8.6 million barrels per day, according to J.P. Morgan.
They have averaged approximately 6.3 million barrels per day so far in June. This level is significantly higher than the figures recorded during April and May.
Strategic Petroleum Reserves Support Refineries
Private oil operators have generally avoided reducing their commercial stockpiles.
Instead, they have relied heavily on releases from government Strategic Petroleum Reserves to keep refinery operations running, the bank said.
This trend has limited the decline in private oil inventories and contributed to the weaker price outlook.
OECD Inventories Expected to Decline Further
J.P. Morgan expects OECD oil inventories to fall by another 50 million barrels between April and July.
The forecast forms part of the bank’s updated outlook for the second half of 2026.
Oil Production Cuts Could Follow in 2027
The bank also warned that oil production may need to decline in early 2027.
Producers are expected to maximize output during the final months of 2026. However, the projected oversupply during the fourth quarter of 2026 and the first half of 2027 could force the market to reduce production.
Such cuts may become necessary to prevent inventories from rising further and to restore balance in the global oil market.
