Piper Sandler raised its second-half 2026 Brent crude forecast by $10 per barrel to $90/b, pointing to tighter Middle East supply and falling Russian refining capacity. The firm called the move mostly a mark-to-market exercise and kept its below-consensus U.S. natural gas outlook unchanged.
Piper Sandler raised its second-half 2026 Brent crude forecast by $10 per barrel to $90/b, citing continued constraints on Middle East oil supplies and reductions in Russian refining capacity. The firm said the developments have tightened the global oil balance more than it expected when it set its previous forecast in July.
Middle East stalemate keeps supply tight
Piper Sandler called the revision "mostly a mark-to-market exercise," noting that Brent averaged $88/b through the third quarter, compared with the $80/b midpoint it set in mid-July. That earlier estimate assumed a memorandum of understanding was in place and that traffic through the Strait of Hormuz ran at a higher baseline. Since then, Mideast supply has grown more constrained, and the firm noted zero diplomatic or military movement toward ending the conflict.
Russian refining cuts add price support
The firm also pointed to reduced Russian refining capacity as a factor tightening the market. According to Piper Sandler: "Drastic cuts to refining capacity in Russia add price support." The reductions have limited an outlet for crude that would otherwise add to global supply, the firm said.
Despite the upgrade, Piper Sandler cautioned that its fourth-quarter Brent estimate could still prove too low, leaving its $90/b figure $2 per barrel above the third-quarter average.
Natural gas forecast held below consensus
Piper Sandler left its outlook for U.S. natural gas unchanged, reiterating fourth-quarter forecasts that remain below consensus. The firm said U.S. natural gas inventories held a 150 billion cubic foot surplus against five-year norms through the injection season, while prices averaged below $3/MMBtu in both the second and third quarters.
The firm attributed the balance partly to annual production growth of 4% to 5%, which it said has kept the natural gas market in easy equilibrium even as power demand and liquefied natural gas exports grow.
Source: InvestorsHub
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