U.S. oil prices are predicted to fall below $60 a barrel by the middle of President-elect Donald Trump’s second term, according to a survey of bank analysts.
The law firm Haynes Boone released a survey Wednesday finding that oil prices are forecast to fall to $58.62 a barrel by 2027. The current price of West Texas Intermediate crude is $69.49 per barrel, and Brent Crude is about $73.23 per barrel.
The survey compiles oil and gas price decks from 26 of the top energy banks to help indicate price expectations.
Several developments will have short- and long-term effects on oil and natural gas prices, according to the survey, including the incoming Trump administration, the wars in the Middle East and Ukraine, increased energy demand, and crypto-mining infrastructure.
The survey added that, despite these developments, long-term price forecasts from the 26 energy banks participating in the fall 2024 survey have not changed significantly since the spring.
“Though substantial deviation in banks’ pricing outlooks remains, there is a considerable tightening of expectations through 2027 for both oil and gas prices,” according to the survey. “The increased consensus among banks may be attributable to increased confidence caused by the conclusion of the U.S. presidential election and greater certainty around near-term carbon policies.”
Trump has vowed to increase U.S. oil production through his “drill baby, drill” agenda. The incoming president is expected to roll back several regulations and laws to help expand gas drilling while shifting away from renewable energy resources such as wind and solar.
“While oil prices are looking a little brighter down the road, the dip in long-term natural gas projections reflects just how much supply-side factors like deregulation are reshaping the landscape,” Haynes Boone energy practice group partner Kim Mai said. “When this many banks start converging on their price predictions, it’s worth paying attention. We’re seeing unusual alignment in their forecasts through 2027.”
As of last month, crude oil prices had dropped to about 2.4% this year.
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Last month, Citi analysts predicted that Brent crude would average $60 a barrel in the next administration due to Trump’s energy policies, such as tariffs and increased oil production.
Reuters reported that analysts said Trump’s policy could create risks for Citi’s current global oil demand growth. However, “Despite the more supportive oil and gas agenda, its immediate impact on physical oil markets is likely to be limited,” analysts said.