Bernstein analysts predict Brent crude will average $65 per barrel in 2026, marking a bottom for the market before a recovery in 2027. The forecast stems from a supply glut, with global demand growth expected to hit 0.8 million barrels per day while non-OPEC supply grows by 1.2 million bpd. Oversupply will likely worsen in the first half of the year, driving inventory builds and softer prices.

Bernstein also sees LNG prices falling to $9 per mmbtu as new supply comes online. While a potential political shift in Venezuela could eventually add 3 million bpd to the market, any disruption to current exports would tighten supply. Bernstein upgraded Santos Ltd and PetroChina, citing strong cash flow at lower oil prices, but downgraded Sinopec due to stretched valuations.