OCBC Group Research has lowered its quarterly Brent crude price forecasts through the second quarter of 2027, citing improving shipping activity through the Strait of Hormuz and renewed expectations of abundant global oil supplies.
The revised outlook reflects the bank’s view that easing supply disruptions have shifted market attention back towards the risk of oversupply.
Brent forecasts revised lower through 2027
OCBC now expects Brent crude to average $75 a barrel during both the third and fourth quarters of 2026, compared with previous forecasts of $85 and $80 respectively.
The bank also reduced its first-quarter 2027 forecast to $73 a barrel from $75, while its projection for the second quarter of 2027 was cut to $71 a barrel from $75.
OCBC strategists said, “Shipping traffic—and thus oil flows—through the Strait of Hormuz has picked up following the U.S.-Iran memorandum of understanding.”
They added, “Expectations of normalized flows quickly pushed crude prices back to pre-conflict levels, reviving the oversupply narrative.”
Oil extends recent decline
Oil prices continued to weaken on Thursday, marking a third consecutive session of losses.
By 06:54 GMT, Brent crude futures had fallen 1.1% to $70.80 a barrel, while U.S. West Texas Intermediate (WTI) crude declined 1.5% to $67.58 a barrel. Both benchmarks had already lost more than 1% during the previous trading session.
The latest decline followed comments from Qatari officials indicating that indirect negotiations between the United States and Iran had made progress on issues relating to the Strait of Hormuz.
A spokesperson for Qatar’s Ministry of Foreign Affairs wrote on X that the talks had achieved “positive progress” on matters linked to the memorandum of understanding that ended the conflict in June, although there was no indication that a permanent peace agreement was close.
Precious metals outlook also downgraded
Alongside its oil forecast revisions, OCBC also reduced its outlook for precious metals.
The bank lowered its end-2026 gold price forecast to $4,360 an ounce from $5,100 and cut its silver forecast to $67 an ounce from $89.50.
OCBC attributed the changes to higher real interest rates, renewed strength in the U.S. dollar and a more hawkish outlook for Federal Reserve policy, factors that have reduced demand for non-yielding assets.
Despite the near-term downgrade, the bank maintained its constructive long-term view, forecasting gold to average $4,180 an ounce by September 2026 before rising to $4,820 by September 2027. It expects silver to increase from $64 to $74 an ounce over the same period.