BofA's 2026 Oil Price Forecasts: Signals of Decline

Bank of America's Oil Analysis for 2026

The financial giant Bank of America (BofA) has noted that the expected decline in oil prices by 2026 could have adverse effects, particularly on shale oil production in the United States. BofA forecasts that the average price of West Texas Intermediate crude oil, which has been around 65 dollars in mid-2023, will drop to as low as 57 dollars per barrel by 2026.

Adverse Effects on Production

If this price scenario comes to fruition, U.S. shale oil production could show a decrease of approximately 70,000 barrels per day in 2026. Such a decline would lead to an annual contraction of around 1 percent in production. Bank of America emphasizes that this possibility is based on its research and forecasts, while also highlighting that the outlook for oil prices in 2026 remains cautious and downward-facing.

Brent Oil Forecasts

The report also includes expectations regarding Brent oil prices. BofA expects the price of Brent crude to fall below 60 dollars per barrel in the first quarter of 2026, while forecasting an average price of around 60 dollars for the entire year. This indicates a significant decrease compared to the approximately 69 dollars average for Brent oil in 2023.

Potential Risk Factors

Bank of America highlights various risk factors that could further pressure oil prices and levels of U.S. shale oil production, indicating that these elements could complicate industry dynamics. In particular, the potential for peace in Ukraine, a market-friendly government coming to power in Venezuela, and possible deterioration in the global economic outlook have been emphasized as additional downside risks for oil prices.