Watch this short video: https://blog.gorozen.com/blog/2025-3q-commentary-video?utm_campaign=30408503-2025%203Q%20Commentary&utm_medium=email&_hsmi=397329472&utm_content=397329472&utm_source=hs_email
As I posted in my last newsletter: I am short-term bearish and long-term bullish on oil prices.
As Adam explains in the video. Demand for oil-based transportation fuels and other products made from oil is stronger than IEA expected. Lack of investment in finding and developing new oil supply will lead to demand exceeding supply in 2H 2026.
This week oil is under pressure from "What happens next in Venezuela". MY TAKE: Venezuela heavy/sour oil may be going to the U.S., but it will take many $billions and several years before Venezuela oil exports increase.
My outlook for oil prices
My outlook for oil prices
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: My outlook for oil prices
Below is from the Josef Schachter on 1-7-2026
"We are quite optimistic on energy prices in 2026, and more so than the consensus. First, we see inventories on land being drawn down starting in Q2/26. Second, we see OPEC having little spare production capacity (as seen from the November OPEC Monthly) and third, we don’t see Russia being able to add much more production if there is a peace deal with Ukraine. Overall we expect WTI to average US$70/b in 2026 with over US$80/b in Q4/26. Our trajectory sees Q1 prices ranging from US$52 - US$66/b, Q2 from US$62 - US$72/b, Q3 from US$68 - US$78/b and Q4 ranging from US$74 - US$84/b. If this develops as forecast, energy stocks should have outsized returns in 2026."
My forecast/valuation models are now based on WTI oil averaging $62.50/bbl in 2026 and $70.00/bbl in 2027. Lower in 1H 2026 and then ramping up to $67.50 in Q4 2026.
For now, I recommend staying more heavily weighted to natural gas and companies that pay high sustainable dividends, like those in our High Yield Income Portfolio.
"We are quite optimistic on energy prices in 2026, and more so than the consensus. First, we see inventories on land being drawn down starting in Q2/26. Second, we see OPEC having little spare production capacity (as seen from the November OPEC Monthly) and third, we don’t see Russia being able to add much more production if there is a peace deal with Ukraine. Overall we expect WTI to average US$70/b in 2026 with over US$80/b in Q4/26. Our trajectory sees Q1 prices ranging from US$52 - US$66/b, Q2 from US$62 - US$72/b, Q3 from US$68 - US$78/b and Q4 ranging from US$74 - US$84/b. If this develops as forecast, energy stocks should have outsized returns in 2026."
My forecast/valuation models are now based on WTI oil averaging $62.50/bbl in 2026 and $70.00/bbl in 2027. Lower in 1H 2026 and then ramping up to $67.50 in Q4 2026.
For now, I recommend staying more heavily weighted to natural gas and companies that pay high sustainable dividends, like those in our High Yield Income Portfolio.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: My outlook for oil prices
ENERGY from Josef Schachter
The US set new records for LNG exports in 2025 as new export capacity was added. This should be exceeded in 2026 as new plants come on steam. Europe was the largest buyer. The US now ships about a quarter of global LNG exports. The US is the largest exporter by far. A new plant, Golden Pass LNG, a joint venture of ExxonMobil and QatarEnergy, is expected to be on later this quarter.
The US runs 3-4 Mb/d of heavy crude in their US Gulf Coast refineries. Canada sends down over 3 Mb/d to the Midwest and the Gulf Coast.
Valero, PBF Energy and Phillips 66 already buy Venezuelan crude from Chevron. They have capacity to process 300 - 400 Kb/d more when it becomes available.
Chevron has sent more ships to Venezuela to bring more crude to the US.
Shell and BP are reportedly eyeing a return to Venezuela when practical.
China will not be happy to have to pay higher prices for Venezuelan crude now that the US is taking over control of exports 'indefinitely’ according to the US Energy Secretary. Having their naval assets in the area gives them control now of Venezuela’s ‘shadow fleet’.
The US expects to receive 30-50 Mb of crude from Venezuela’s ‘shadow fleet’ as compensation for ‘who knows what.’ President Trump keeps on making wild announcements and leaves it to his Secretary of Energy and Secretary of the Interior to implement. There has been no comments from the new Venezuelan administration.
Russia’s crude exports fell sharply in the last weeks of 2025. Estimates of 3.43 Mb/d are being noted. This decline is due to the ongoing attacks by Ukraine on Russian refineries, pipelines, ports and tankers.
Bullish pressure for crude prices comes from:
US Tariffs on imports would raise prices for consumers and businesses. We now need to wait for upcoming data to see what occurs. Trade will now expand to new countries, increasing energy consumption. For example, China has nearly doubled its exports to African countries.
Non-OPEC supplies in general are not growing.
Some OPEC members have not invested to increase their production so for many members any quota increase is meaningless.
China continues to build its SPR.
Bearish pressure for crude comes from:
Demand weakness in many European OECD economies.
US and China’s demand for crude and products is not growing materially in terms of final demand at this time (excluding their SPR’s which are growing).
The US set new records for LNG exports in 2025 as new export capacity was added. This should be exceeded in 2026 as new plants come on steam. Europe was the largest buyer. The US now ships about a quarter of global LNG exports. The US is the largest exporter by far. A new plant, Golden Pass LNG, a joint venture of ExxonMobil and QatarEnergy, is expected to be on later this quarter.
The US runs 3-4 Mb/d of heavy crude in their US Gulf Coast refineries. Canada sends down over 3 Mb/d to the Midwest and the Gulf Coast.
Valero, PBF Energy and Phillips 66 already buy Venezuelan crude from Chevron. They have capacity to process 300 - 400 Kb/d more when it becomes available.
Chevron has sent more ships to Venezuela to bring more crude to the US.
Shell and BP are reportedly eyeing a return to Venezuela when practical.
China will not be happy to have to pay higher prices for Venezuelan crude now that the US is taking over control of exports 'indefinitely’ according to the US Energy Secretary. Having their naval assets in the area gives them control now of Venezuela’s ‘shadow fleet’.
The US expects to receive 30-50 Mb of crude from Venezuela’s ‘shadow fleet’ as compensation for ‘who knows what.’ President Trump keeps on making wild announcements and leaves it to his Secretary of Energy and Secretary of the Interior to implement. There has been no comments from the new Venezuelan administration.
Russia’s crude exports fell sharply in the last weeks of 2025. Estimates of 3.43 Mb/d are being noted. This decline is due to the ongoing attacks by Ukraine on Russian refineries, pipelines, ports and tankers.
Bullish pressure for crude prices comes from:
US Tariffs on imports would raise prices for consumers and businesses. We now need to wait for upcoming data to see what occurs. Trade will now expand to new countries, increasing energy consumption. For example, China has nearly doubled its exports to African countries.
Non-OPEC supplies in general are not growing.
Some OPEC members have not invested to increase their production so for many members any quota increase is meaningless.
China continues to build its SPR.
Bearish pressure for crude comes from:
Demand weakness in many European OECD economies.
US and China’s demand for crude and products is not growing materially in terms of final demand at this time (excluding their SPR’s which are growing).
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group