Vi e w p o i n t | 13 Jan 2026 16:44:45 ET │ 8 pages Oil Monitor Upgrading 0-3mth Brent forecast to $70/bbl on rising geopolitical risks; spikes are opportunities for more producer hedging CITI'S TAKE Last week, with Brent at ~$60-61/bbl, we wrote on Russia/Ukraine and Iran risks supporting higher oil prices, near-term. We now think this oil rally has room to extend above our $55-65/bbl forecast range in the coming days. We raise our 0–3mth price target for Brent oil to $70/bbl from current spot at ~$65/bbl ...

The discount on U.S. crude futures to the global benchmark Brent has grown by around $1 per barrel since the U.S. ousted Venezuelan President Nicolas Maduro on January 3 and took control of the South... ...

Oil Market Insights - Iran protests have contributed to a bullish start for 2026, raising concerns about potential supply disruptions, with ICE Brent prices nearing $63 per barrel, marking a $2 increase and the third consecutive weekly gain [2] - The US government's inability to attract investments from oil majors in Venezuela has tempered expectations for a near-term surge in Venezuelan oil production, despite Treasury Secretary Bessent's encouragement for 'wildcatters' to drill [2][6] Geopolitical Developments - The US military seized a Russian-flagged tanker after a three-week pursuit, highlighting ongoing tensions in maritime oil transport [3] - Iraq has approved the nationalization of the West Qurna 2 oilfield, previously operated by Lukoil, due to US sanctions, with operations now under the control of state-owned Basrah Oil [4] Mergers and Acquisitions - Rio Tinto and Glencore are in early discussions to merge, potentially creating the world's largest mining company valued at $207 billion, building on a previous stalled merger proposal [5] - Spanish and Portuguese refiners, Moeve and Galp, are negotiating a merger of their downstream businesses, aiming for a combined capacity of 690,000 b/d, which represents 5% of Europe's refining capacity [7]

Group 1 - Crude oil prices experienced a significant decline in 2025, with Brent oil dropping nearly 20% from the mid-$70s to the low $60s due to increasing global supplies and demand concerns [1][3] - Predictions for 2026 indicate that Brent oil prices may average around $55 to $56 per barrel, with potential lows below $50 if geopolitical conditions change [3][5] - Increased oil supplies from major oil companies and OPEC are expected to lead to a supply glut in 2026, contributing to bearish market sentiments [4][5] Group 2 - Lower oil prices are anticipated to trigger a new wave of consolidation in the oil sector, similar to previous trends observed during price declines [6] - Major oil companies like ExxonMobil and Chevron have been active in mergers and acquisitions, with significant deals completed recently to enhance production and cash flow [7][8] - The focus for oil companies may shift towards gas-fueled growth drivers, such as gas-fired power plants, to adapt to changing market conditions [7]

December 22, 2025 10:31 PM GMT Global Macro Commentary | Global December 22: Risk-On Into Year- End USD/JPY retraces down to 157 as Japan MoF reiterates potential FX action; bunds outperform slightly after ECB's Schnabel moderates rate hike expectations; oil rises on geopolitical tensions in Venezuela; weak 2y UST auction; US equities extend rally; DXY at 98.27 (-0.3%); US 10y at 4.17 (+1.6bp). The Global Macro Commentary will resume on Friday, January 2. Global rates see mixed but muted moves while JPY ret ...

Global Economic Overview - A higher nominal world has emerged, driven by persistent fiscal deficits, rising protectionism, and competitive currency devaluations, leading to a higher equilibrium for inflation and interest rates [2][20] - Global activity remained resilient in Q4 2025, despite renewed tariff pressures and persistent geopolitical tensions [4][20] - The US economy experienced moderate growth with easing inflation pressures and rising policy and trade uncertainty [4][8] United States - In Q4 2025, the US economy showed slowing but still positive activity, with disinflationary trends and intensifying policy and trade uncertainty [8][11] - Payroll gains decelerated, unemployment rose to 4.4%, and job cuts surged, indicating a softening labor market [8][11] - The Federal Reserve cut rates by 25 basis points in October and December, concluding quantitative tightening [11] Europe - Economic conditions in Europe improved modestly, with the HCOB Composite PMI rising to a 17-month high of 52.5 in October, although recovery remained uneven [12][15] - Eurozone headline CPI held steady at 2.1% in October and 2.2% in November, complicating the ECB's ability to guide markets towards a clearer easing trajectory [12][15] - The quarter reaffirmed a fragile but stabilizing growth trajectory, constrained by tight financial conditions and external trade headwinds [15] China and Emerging Markets - China maintained a GDP growth target of around 5% for 2025, despite facing weak domestic demand and property stress [16][20] - The People's Bank of China (PBoC) maintained an accommodative stance, relying on targeted liquidity injections to stabilize the property sector [16][20] - Asian equities modestly outperformed global peers, supported by strong AI-related demand and solid earnings [19][20] Investment Conclusions - The global economy continues to show resilience despite trade frictions and policy uncertainty, with a low probability of a deep US recession [20] - A moderate re-acceleration in global activity could revive cyclical inflation, emphasizing the importance of corporate earnings [20] - The investment strategy prioritizes capital preservation while using volatility and dispersion as opportunities for active management [20]

Brent oil dropped below $60 a barrel for the first time since May, breaching a key level as supply outpaces demand https://t.co/BdoRnvf82V ...

Core Viewpoint - Chevron has established itself as a leading dividend stock, having increased its dividend for 38 consecutive years, with a compound annual growth rate of 7% over the past 25 years and 5% over the last decade, despite oil price volatility [1][4]. Group 1: Dividend Growth and Financial Strength - Chevron anticipates over 10% annual growth in adjusted free cash flow and earnings per share through 2030, assuming Brent oil averages around $70 per barrel [4]. - Among the 100 largest companies in the S&P 500, only 35 expect to achieve more than 10% annual earnings per share and free cash flow growth through 2027, with Chevron being the only one in that group offering a dividend yield above 4% [5]. Group 2: Growth Drivers - Chevron's growth strategy is supported by a robust five-year plan, focusing on low-cost upstream oil and gas operations, and strategic acquisitions, including the recent acquisition of Hess [6][7]. - The company has multiple expansion projects underway, including the $6.8 billion Hammerhead project and the Longtail project expected to come online by 2030 [8].

Core Viewpoint - The oversupply in the oil market is expected to lead to lower prices for the remainder of the year, with the Brent oil price likely to end 2025 with an annual decline if there is no increase in demand [1] Industry Summary - The oil market is currently experiencing an oversupply situation, which is anticipated to exert downward pressure on prices [1] - The forecast indicates that the Brent oil price may decline annually through 2025, contingent on demand levels remaining stable [1]

Core Insights - Oil prices experienced a modest increase in early Asian trading, with Brent at $65.12 per barrel and West Texas Intermediate at $61.33, following OPEC+'s decision for a limited production increase in December and a pause on further hikes in early 2026, indicating caution amid demand uncertainty [1][2]. Group 1: OPEC+ Production Decisions - Eight OPEC+ members agreed to raise production by 137,000 barrels per day in December 2025, consistent with previous increases in October and November [2]. - The group announced a pause on output hikes for January, February, and March 2026, citing seasonal demand weakness typically observed in the first quarter [2][3]. Group 2: Market Reactions and Interpretations - The pause in production increases is viewed positively as it limits additional supply, potentially supporting oil prices [3]. - Conversely, the modest increase for December and the hold in early 2026 suggest OPEC+ is cautious about demand softness, particularly in Asia [3]. Group 3: External Supply Risks - Tighter U.S. sanctions on Russian oil producers and uncertainties regarding export flows contribute to the overall supply risk landscape [4]. - Robust output from non-OPEC producers, including U.S. shale, continues to restrain the upside potential for crude prices amid modest demand growth [4]. - Geopolitical tensions, including threats of military action in Nigeria and Venezuela, raise the risk of supply disruptions from these major oil-producing countries [4].