JPMorgan Chase & Co. (NYSE:JPM) has warned that a surge in global oil supply could trigger a dramatic crash in prices, potentially cutting Brent crude to the $30-per-barrel range by 2027.
Oil Prices May Collapse Amid Oversupply
JPMorgan analysts cited a growing imbalance between supply and demand as the main driver behind the expected price collapse, reported Business Insider.
"Demand, defying widespread bearish sentiment, has consistently exceeded expectations. Yet supply has outpaced these gains by more than twofold, with the bulk of growth coming from the Americas," said JPMorgan analyst Natasha Kaneva.
Most of the additional supply is expected from non-OPEC+ producers, particularly in the U.S., making oversupply a key concern.
The bank forecasts that Brent prices could slip below $60 in 2026, drop into the low $50s by the year's end, and average $42 in 2027, potentially sliding into the $30s if surpluses continue.
The projected surplus is roughly 2.8 million barrels per day in 2026 and 2.7 million in 2027, unless governments intervene to curb production.
At last check on Wednesday, Brent Crude Futures were unchanged at $62.15 per barrel, according to Benzinga Pro data.
Newsom Opposes Offshore Drilling As Chevron Projects Oil Growth
California Governor Gavin Newsom opposed the Trump administration's reported plans to expand offshore drilling in California, calling the proposals "dead on arrival" and highlighting bipartisan resistance.
Reports suggested six drilling rights auctions could take place off the California coast between 2027 and 2030.
Meanwhile, Chevron projected 2–3% annual output growth through 2030, highlighted higher-cost synergies from its Hess integration, and announced plans for an AI-driven data centre in West Texas by early 2026.
The company cut long-term capital spending to $18–$21 billion, planned $1–2 billion in annual asset sales, and targeted $3–4 billion in cost reductions by 2027, while forecasting over 10% annual earnings growth at $70 Brent and a cash-flow breakeven below $50 per barrel.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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