Brent closes at $113.88 as UBS update holds $90 forecast for March 2027
Key Facts
Brent crude closed at $113.88 a barrel on October 27, according to EL7 data, after reaching $115.81 the previous day. The market is being shaped by risks to tanker passage and insurance and shipping costs, while available facts do not support attributing a newer forecast to UBS. In an update published on September 9, the bank raised its Brent forecast for the end of 2026 to $95 a barrel from $85. It also raised its estimate for March 2027 to $90 from $80. UBS said it had raised its forecasts to "$95 a barrel by year-end and $90 a barrel for March 2027" from $85 and $80, respectively.
U.S. Energy Information Administration data show a rapid rise in prices during the third quarter. The Brent futures contract began the quarter at $72 a barrel on July 1, topped $100 on July 23, then peaked at $109 on September 15. In the final two weeks of the quarter, Brent averaged about $104 a barrel. The spot price reached about $132 at its mid-September peak. These levels reflect the widening supply pressures in the period before the agency's October forecast.
Global inventories were also shrinking, according to EIA estimates. They fell by an average of 1.9 million barrels a day in the third quarter of 2026, and the agency forecast a further decline averaging 0.7 million barrels a day in the fourth quarter. UBS said in its update that oil held at sea fell by 150 million barrels over the two months through September 9. In China, crude imports recovered in August to nearly 9 million barrels a day, from 7.15 million in June. These figures put inventories and import flows at the center of the market backdrop for the bank's September update.
Transport and insurance costs are adding pressure to the price of oil delivered to buyers. The EIA said higher risks to tanker passage are increasing shipping costs and the risk premium in oil prices. Tanker rates reached record levels in September, according to the agency, reflecting higher insurance costs. It also said that using longer routes limits the number of available vessels. This makes transport costs part of the risks markets are tracking alongside the price of crude itself.
In its October forecast, the EIA raised its expected average Brent price for the fourth quarter of 2026 to $105 a barrel, up $14 from the previous month's estimate. But it expects the average price to reach $84 a barrel in 2027. The agency assumes most regional production will return to pre-conflict averages by the end of the second quarter of that year. On that basis, it forecast that average Brent would fall to $74 a barrel in the fourth quarter of 2027. At the same time, it warned that oil flows and prices would remain volatile because of the conflict.