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.

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-

The DFM fell 0.3% yesterday on turnover of AED 550.4 mn.The index is up 12.6% YTD.

In the green: Talabat Holding (+5.2%), Ithmaar Holding (+4.2%) and Chimera S&P UAE UCITS ETF - Share Class A - Accumulating (+2.9%).

In the red: Sukoon Ins. (-10.0%), Gulf Navigation Holding (-9.9%) and Agility The Public Warehousing Company (-4.1%).

Over on the ADX, the index fell 0.3% on turnover of AED 926.4 mn. Meanwhile, Nasdaq Dubai was down 0.3%.

CORPORATE ACTIONS-

Fidelity United kicks off phase one of AED 30 mn capital raise: UAE-based insurer Fidelity United Ins. Company invited shareholders to subscribe to the first AED 30 mn tranche of its approved capital increase, following approvals from the Central Bank of the UAE and the Securities & Commodities Authority (SCA), according to a disclosure (pdf). The phased program lifts issued capital to AED 267 mn, up from AED 160 mn, across three stages running to December 2026.

Phase one covers 30 mn new shares, increasing issued capital to AED 190 mn. Shares are offered only to existing shareholders, with eligibility based on holdings as of 12 December. Shareholders are entitled to one right for every 5.3 shares held. Rights can be traded on ADX between 18-30 December.

Subscriptions open 26 December, and close 8 January 2026, with allotment expected by 15 January and listing by 19 January. Investors may apply for additional shares, which will be allocated pro rata if any remain after the primary subscription.

Phase two covers another 30 mn shares (AED 30 mn) scheduled for February 2026, while phase three will cover the remaining 47 mn shares (AED 47 mn) in December 2026. All shares among the three phases carry a nominal value of AED 1.

Proceeds will support solvency restoration, business continuity, and growth plans across the insurer’s core lines, including fire, life, medical, transport, and liability ins. First Abu Dhabi Bank acts as lead receiving bank, with Grant Thornton serving as auditor and subscription auditor, and Hadef & Partners as advisor.