JPMorgan sees oil prices dipping as low as USD 30 per barrel in 2027

Oil prices could crash over the coming couple of years: Global oil markets are entering a phase of oversupply, particularly as production from non‑OPEC producers continues to rise, while demand growth remains sluggish, JPMorgan analyst Natasha Kaneva wrote. Brent crude could average USD 57 per barrel in 2027 and West Texas Intermediate (WTI) could average USD 53. If oversupply persists, prices face further downside risk.

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Non‑OPEC+ producers, led by the US, Brazil, Canada, and Guyana, are expected to drive robust growth that outpaces demand, according to outlooks from the International Energy Agency and the Energy Information Administration. Global consumption remains sluggish due to increased efficiency, the rise of EVs, and weaker macroeconomic conditions.

If a more bearish scenario plays out, oil could fall into the USD 30s by 2027, Kaneva wrote.

Things are likely to play out somewhere in the middle: “The magnitude suggested by market imbalances is unlikely to fully materialize in practice. Adjustments are expected on both the supply and demand sides; however, the greatest burden of rebalancing will almost certainly fall on supply,” she wrote.

IN CONTEXT- Brent crude sat at around USD 63.13 per barrel yesterday, rising 1% from one-month lows following Russia-Ukraine peace talks.

For major producers like Saudi Arabia, higher oil prices are critical to fiscal stability and economic planning as a 1 mn bbl / d increase in output could improve the Kingdom’s fiscal and current-account balances by about 2.3% to 2.7% GDP, Bloomberg noted. Saudi Arabia’s fiscal break‑even oil price is estimated at USD 94 a barrel, rising to USD 111 once domestic spending by the Public Investment Fund is accounted for.

For the UAE, higher oil output will drive a growth in the sector to 5.8% next year, up from 4.9% this year, according to Fitch Solutions’ research unit BMI. “Against this backdrop, narrower net exports deficit and stronger fixed investment will be the main drivers of the growth acceleration in 2026,” BMI wrote. The looming oil glut, however, could drag prices down, forcing OPEC+ to halt output increases while weaker global growth could curb non‑oil activity.

Lower prices could be good for Egypt: Lower global oil prices will benefit Egypt’s external balances given its position as a net importer in recent months, EFG Hermes’ Head of Research Ahmed Shams El Din told us earlier this year.

MARKETS THIS MORNING-

Asian markets are up in early trading this morning driven by growing expectations of rate cuts in the US. Japan’s Nikkei is up 1.3% and the Kospi is up 1.2%, while the Shanghai Composite and Hang Seng are looking at more modest gains.

THE CLOSING BELL: TADAWUL-

The TASI fell 0.5% yesterday on turnover of SAR 5.5 bn. The index is down 11.6% YTD.

In the green: Naqi (+4.7%), Saudi Cable (+4.3%) and Rasan (+3.8%).

In the red: Masar (-9.1%), Abo Moati (-4.1%) and Naseej (-3.7%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.6% yesterday on turnover of SAR 13.6 mn. The index is down 24.1% YTD.

In the green: Leen Alkhair (+12.2%), Altwijri (+5.5%) and Neft Alsharq (+4.5%).

In the red: Leaf (-7.9%), Alshehili Metal (-7.8%) and Multi Business (-7.3%).

CORPORATE ACTIONS-

Sahara International Petrochemical Company (Sipchem) will distribute a SAR 362.6 mn dividend payout for 2H 2025 at SAR 0.5 apiece, it said in a disclosure to Tadawul. The distribution date is set for Monday, 15 December.