Bank of America is sticking to its cautious view on Brent crude prices for the second half of 2025, anticipating an average of $63.50 per barrel and warning that prices could temporarily fall below the $60 mark.
The bank expects an average oversupply of about 890,000 barrels per day from July 2025 through June 2026, a glut that could add roughly 100 million barrels to global inventories over that span. This projection holds despite stronger-than-anticipated demand, as the expansion of OPEC+ output is expected to surpass consumption growth.
BofA analysts point out that the recent price softness is already weighing on North American drilling activity, with U.S. shale production growth slowing sharply. Future non-OPEC+ supply gains are shifting toward South America, where large offshore projects dominate. OPEC+ output, meanwhile, is set to edge higher in line with recent increases in production quotas.
On the consumption side, the bank forecasts demand to rise by roughly 900,000 barrels per day this year and by 1 million barrels per day in 2026. Those gains are supported by upgraded global GDP growth forecasts of 3% for 2025 and 3.1% for 2026. Risks to this view include fallout from ongoing trade disputes and possible secondary tariffs targeting India.
BofA also projects that China’s strategic crude storage capacity will tighten over the next six months. That shift could push the Brent market into contango, with near-term prices slipping below $60 per barrel before a rebound above $70 by mid-2026, driven by looser fiscal and monetary policies, a weaker U.S. dollar, renewed OPEC+ supply discipline, and lower U.S. output.
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