February 2026 Oil Update Daan Struyven Managing Director Co-Head of Commodities Research; Head of Oil Research Goldman Sachs & Co. LLC +1 212-357-4172 daan.struyven@gs.com Yulia Grigsby Vice President Senior Energy Strategist Goldman Sachs & Co. LLC +1 646-446-3905 yulia.grigsby@gs.com The estimated fair value sums the fair value estimates for 1m/36m timespreads and for 36m futures. The fair value estimate of timespreads uses OECD commercial stocks as days of demand (1-4 months ahead) and interest rates. Th ...

22 February 2026 | 6:57PM EST Commodities Research OIL ANALYST Raising Our Price Forecast on Lower OECD Stocks Despite Same Global Surplus; Geopolitical Risks Persist Daan Struyven +1(212)357-4172 | daan.struyven@gs.com Goldman Sachs & Co. LLC Yulia Zhestkova Grigsby +1(646)446-3905 | yulia.grigsby@gs.com Goldman Sachs & Co. LLC Alexandra Paulus +1(212)902-7111 | alexandra.paulus@gs.com Goldman Sachs & Co. LLC Filippo Cuscito +44(20)7051-9073 | filippo.cuscito@gs.com Goldman Sachs International Investors sh ...

Group 1: Oil Market Dynamics - Oil prices rose to a six-month high, with benchmark Brent increasing by 0.5% to $72 a barrel, marking a weekly gain of over 6% [1] - The rise in oil prices is influenced by escalating tensions in Iran and the U.S. military buildup in the Middle East, which could impact oil supply from a region that produces about a third of the world's oil [5][6] Group 2: Stock Market Reactions - Asian shares dropped by 0.4%, following declines on Wall Street, while U.S. and European equity-index futures showed a slight increase of 0.3%, indicating potential stabilization in sentiment [2] - Wall Street experienced declines, particularly among alternative asset managers, after Blue Owl Capital Inc. restricted withdrawals from one of its funds [6] Group 3: Geopolitical Risks and Economic Indicators - The U.S. military's actions in the Middle East introduce new geopolitical risks, halting a tentative recovery in equities and dampening risk appetite [3] - Traders are closely monitoring upcoming U.S. economic and inflation data, especially after recent Federal Reserve meeting minutes raised concerns about price pressures [7] Group 4: Currency Movements - The U.S. dollar is on track for its best week in four months, driven by reduced expectations for Federal Reserve interest rate cuts and increased demand for safe-haven assets due to geopolitical risks [8] - The Bloomberg Dollar Spot Index rose by 0.9% this week, marking its largest gain since October, influenced by heightened inflation concerns and the military buildup in the Persian Gulf [9]

Group 1 - The core point of the article highlights the strong performance of the U.S. labor market as indicated by the January non-farm payroll data, which exceeded market expectations and impacted market sentiment regarding the Federal Reserve's interest rate decisions [1][3] - The January non-farm payroll data showed an increase of 130,000 jobs, significantly above the market expectation of 70,000 jobs, and the unemployment rate decreased by 0.1 percentage points to 4.3%, lower than the expected 4.4% [3] - Average hourly earnings for private sector non-farm employees rose by $0.15 to $37.17, reflecting a year-on-year increase of 3.7%, also surpassing market expectations [3] Group 2 - The strong non-farm payroll data led to a rapid decline in the market's expectations for a rate cut by the Federal Reserve, with the probability of a 25 basis point cut in March dropping from 19.6% to 6%, while the probability of maintaining the current rate rose to 94% [3] - Following the release of the non-farm data, U.S. stock indices experienced a decline, with the Dow Jones Industrial Average closing at 50,121.40 points, down 0.13%, and the Nasdaq Composite Index down 0.16% [4] - Concerns regarding the AI industry and the cooling of rate cut expectations contributed to the downward pressure on U.S. stocks, with technology stocks particularly affected [4] Group 3 - In contrast to the pressure on U.S. stocks and bonds, precious metals such as gold and silver saw a V-shaped reversal, with gold prices rising from a low of $5,020.07 per ounce to $5,089.36 per ounce [5] - The rise in gold and silver prices is attributed to safe-haven demand amid ongoing AI industry concerns and a retreat in the U.S. dollar, despite the cooling rate cut expectations [5] - The oil market exhibited a volatile pattern, with Brent crude oil reaching nearly $70 per barrel before retreating due to global demand concerns and a strengthening dollar, ultimately closing at $69.40 per barrel [5] Group 4 - Market focus is shifting towards upcoming U.S. CPI data and statements from Federal Reserve officials to further assess the direction of monetary policy, while ongoing dynamics in the AI industry and geopolitical issues in the Middle East continue to influence market sentiment [6] - The sustained pressure on U.S. stocks and bonds, the momentum of gold and silver prices, and the potential for oil prices to break out of their current volatility remain to be validated by future data and events [6]

I think oil right now and just the rest of the commodity complex is really dominated by three themes geopolitics, trade and technology. And certainly right now, geopolitics are a main the main driving force pushing oil close to the high end of of this year's range. But we still expect, of course, if we have kind of a either a peace deal with with Iran or maybe just just kind of a limited just a limited skirmish like we had back in June for prices to revert back to around $60 a barrel on Brent.The market is ...

Group 1: Market Performance - The FTSE 100 reached a record high of 10,342 points, closing up 1.15% despite declines in gold and oil prices [4][6][8] - The FTSE 250 also hit a four-year high of 23,426 points, indicating strong performance in the mid-cap sector [6][8] - European stocks rallied, with France's CAC rising 0.8% and Germany's DAX advancing 1.1%, while the continent-wide Stoxx 600 index climbed just over 1% [9] Group 2: Commodity Prices - Gold prices fell sharply, down 3.6% to $4,649 an ounce, compared to nearly $5,600 the previous week, marking a significant decline [5][53] - Silver experienced a dramatic drop, plunging 30% on Friday and an additional 7% to $78.47, far below its record high of $121 [5][53] - Brent crude oil prices decreased nearly 5% to $66 a barrel, influenced by geopolitical developments and market sentiment [5][62] Group 3: Natural Gas Market - US natural gas futures dropped 26% to $3.21 per million British thermal units, marking the largest decline in 29 years due to forecasts for warmer weather [2] - Europe's TTF benchmark gas price fell 16.5% to €33.32 per megawatt-hour, easing supply concerns amid milder temperature predictions [2] Group 4: Bitcoin and Cryptocurrency - Bitcoin hit a 10-month low, falling below $80,000, with significant losses attributed to a broader market sell-off [3][50] - The CEO of the UK's largest Bitcoin company reported a loss of nearly $100 million but expressed intentions to continue purchasing Bitcoin [11][12] Group 5: Federal Reserve and Economic Outlook - The nomination of Kevin Warsh as the next Federal Reserve chairman has led to market volatility, with expectations of tighter monetary policy impacting investor sentiment [20][43] - Analysts predict that Warsh may lower interest rates while simultaneously reducing the Fed's balance sheet, aiming to support economic growth without increasing inflation [35][38]

Summary of Key Points from Morgan Stanley Research Industry and Company Overview - The report focuses on the US economic outlook, macroeconomic trends, and investment strategies across various sectors including equities, fixed income, and commodities. Core Insights and Arguments 1. **US Economic Growth vs. Labor Market**: There is a contrast between strong US economic growth and a slow labor market, with potential scenarios of either stronger job growth leading to inflation or a productivity boom resulting in disinflation [1][2][7] 2. **Investment Outlook**: The report suggests a positive outlook for US markets driven by operating leverage, pro-cyclical policies, and AI efficiency gains, leading to higher-than-consensus EPS growth expectations [5][6] 3. **Sector Preferences**: Key sector overweights include banks, semiconductors, defense, and utilities, with a preference for US small caps over large caps [5][6] 4. **Global Economic Forecasts**: Global GDP growth is projected at 3.3% for 2025-2027, with US growth at 2.4% for 2025 and 2026, and inflation rates expected to stabilize [9] 5. **Monetary Policy Expectations**: The Federal Reserve is expected to maintain its current policy rate of 3.625% with potential cuts in the second half of the year, influenced by inflation trends [15][24] Additional Important Insights 1. **Commodities Outlook**: The report indicates a bullish outlook for metals, particularly gold, due to central bank buying and geopolitical uncertainty, while the oil market is expected to face a surplus in 1H26 [19][21] 2. **Credit Market Dynamics**: There is an anticipated increase in capex and M&A activity in 2026, with a preference for high yield (HY) over investment grade (IG) credit [27][28] 3. **Currency Forecasts**: The USD is expected to weaken against major currencies, with the DXY forecasted to fall about 5% to 94 by mid-2026 [16][17] Conclusion - The report presents a cautiously optimistic view of the US economy and markets, highlighting potential growth driven by technological advancements and supportive fiscal policies, while also addressing risks associated with inflation and labor market dynamics. The investment strategy emphasizes sector selection and asset allocation towards equities and commodities, particularly in the context of changing monetary policies.

Summary of Key Points from the Conference Call Industry Overview - The report discusses the commodities market, focusing on metals and oil, highlighting geopolitical influences and market dynamics [1][2][3]. Core Insights and Arguments - **Geopolitical Impact**: Political news, including the US DOJ Fed probe and President Trump's tariff announcement, has significantly influenced market movements, particularly boosting precious metals like Silver, which saw an increase of 11.6% [1]. - **Earnings Season**: The US Q4 earnings season has shown solid results from US banks, which has supported a higher risk appetite among investors [1]. - **Inflation Data**: The US core CPI came in below consensus at +0.24% month-over-month and +2.64% year-over-year, marking the lowest reading since March 2021 [1]. - **Oil Market Trends**: Oil prices are in a downtrend due to excess supply, with forecasts suggesting Brent and WTI prices may trend down to $56 and $52 per barrel, respectively [6]. The correlation between oil and the Dollar is currently very positive, as the US is now a net oil exporter [2][12]. - **Metals Performance**: Precious metals, particularly Gold and Silver, are preferred over energy commodities due to their better pricing of geopolitical risks. The report indicates a positive skew for Gold driven by policy easing and rising demand from emerging market central banks [3][19]. - **Emerging Markets**: Emerging market equities and materials stocks have shown significant returns, with MSCI EM and EM materials stocks delivering the largest returns last week [2]. Additional Important Insights - **Investor Behavior**: There is a trend of investors reducing US asset dominance in their portfolios, which has led to increased support for Gold and other precious metals [2]. - **Copper Market**: Copper prices have rallied due to speculative inflows but retraced after the deferral of Section 232 tariffs [2]. - **Currency Movements**: Currencies of metal-producing countries have strengthened against the USD, indicating a favorable environment for these currencies [2][14]. - **Market Sentiment**: The report maintains a modestly pro-risk stance into 2026, suggesting that while commodities are viewed neutrally, their diversification potential against geopolitical risks is acknowledged [3]. This summary encapsulates the key points from the conference call, providing insights into the current state of the commodities market, particularly focusing on metals and oil, and the broader economic implications.

Core Insights - Parex Resources Inc. has published its 2026 guidance, indicating a strategic focus on reducing sustaining capital while investing in projects with growth potential for shareholders [1][3] 2026 Guidance - The company anticipates a Brent crude oil average price of $60 per barrel and average production between 45,000 to 49,000 barrels of oil equivalent per day (boe/d) [5] - Funds flow provided by operations is projected to be between $385 million and $420 million, with a netback of $23 to $24 per boe [5] - Capital expenditures are estimated to be between $280 million and $320 million, with a midpoint free funds flow of $105 million [5] Capital Expenditure Breakdown - Of the planned $300 million in capital expenditures, approximately $190 million will support base development and near-field exploration, while $65 million is allocated for acquisition capital related to farm-in agreements [6][8] - The company aims for an average production of 47,000 boe/d in FY 2026, reflecting a 5% growth compared to FY 2025 [6] Planned Activities - Significant activities include drilling multiple wells in various blocks, optimizing existing production, and investing in waterflood and polymer programs [8] - The company plans to drill three independent prospects and execute a 10-well exploration program, with a total estimated cost of around $20 million [8] Leadership Transition - Wayne Foo will retire as Board Chair and Director effective May 12, 2026, with Glenn McNamara set to assume the role [1][12] - The transition is part of a succession plan, ensuring continuity in leadership and strategic direction [12][14] Short-Term Outlook - The company has five operated rigs and one non-operated rig currently in operation, reflecting strong performance from Q4 2025 into 2026 [9] - Elevated capital expenditures are expected in the first half of 2026, with more moderate spending anticipated for the latter half [10]

Group 1 - Oil prices have decreased, with Brent crude falling below $64 a barrel as tensions regarding Iran have eased and traders are assessing the implications of President Trump's Greenland annexation threat [1][2] - The International Energy Agency has projected a significant oversupply of more than 3.8 million barrels per day for the year, contributing to downward pressure on oil prices [3] - Kazakhstan's largest oil producer has temporarily halted production at the Tengiz and Korolev fields due to precautionary measures following two fires, indicating potential supply disruptions [3] Group 2 - The premium on Brent's nearest contract over futures for the following month has increased to about 70 cents a barrel, indicating short-term market tightness despite overall price pressure [4] - ING Groep NV reported that the prompt ICE Brent timespread remains firm, suggesting some tightness in the spot physical market [4] - Trading volumes may be lower than usual due to a holiday in the US, which could affect market dynamics [4]