Wall Street Cuts Long-Term Oil Forecasts on Weak Demand

Wall Street is turning increasingly bearish on oil prices over the long term. JPMorgan, Citi and other major analysts have revised down their long-term oil price forecasts, citing weaker global demand that is outweighing lingering geopolitical risks in the Middle East. The shift reflects a growing consensus that the global oil market faces a prolonged period of demand weakness. Factors such as slowing economic growth in China, the world's largest crude importer, and the accelerating energy transition are weighing on consumption. While geopolitical tensions in the Middle East remain a source of supply risk, analysts believe that the demand-side headwinds are more persistent. For traders tracking real-time fuel quotes on NowPrice, the revised forecasts suggest that the recent downward trend in crude prices may have further to run.

The bearish outlook is reinforced by structural factors in the physical market. OPEC+ holds significant spare capacity—estimated at over 5 million barrels per day—which can be quickly deployed to offset any supply disruptions, capping price spikes. Meanwhile, the Brent-WTI spread has narrowed, reflecting ample U.S. supply, with the Strategic Petroleum Reserve still near 370 million barrels after last year's releases. Refinery margins, or crack spreads, have weakened as gasoline and diesel demand falter, further pressuring crude. In China, marginal demand growth has stalled as the property sector slump and EV adoption cut into oil use. Saudi Arabia and Russia, despite their coordination within OPEC+, face pressure to maintain market share, limiting their ability to sustain deep cuts. The futures curve has shifted from backwardation to contango for some contracts, signaling expectations of oversupply.

Looking ahead, market participants will focus on upcoming OPEC+ meetings and monthly demand reports from the International Energy Agency and the U.S. Energy Information Administration. Any signs of deeper production cuts by OPEC+ could provide temporary support, but the prevailing view among analysts is that cheap oil is here to stay unless there is a significant and sustained pickup in global economic activity. Key triggers to watch include a potential recovery in Chinese industrial output, a sharper-than-expected slowdown in U.S. shale output, or an escalation in Middle East conflicts that disrupts actual supply rather than just threatening it. Until then, the combination of weak demand, ample spare capacity, and rising non-OPEC supply suggests that low oil prices may persist.