Oil prices could fall sharply in late 2026 into 2027, says Charles Schwab's Sonders

Watch on YouTube ↗  |  January 05, 2026 at 19:43  |  4:07  |  CNBC
Speakers
Liz Ann Sonders — Chief Investment Strategist, Charles Schwab

Summary

Liz Ann Sonders of Charles Schwab joins CNBC's Power Lunch to discuss the 2026 market setup, geopolitics, energy, and market breadth. She says energy is neutral/market perform and sees global oil oversupply pressuring prices, while geopolitical events matter mainly through energy channels. She also notes midterm election years tend to be choppy and range-bound, and warns that cap-weighted indexes like the S&P 500 have masked significant rotation and drawdowns beneath the surface.

  • Sonders sees Venezuela/geopolitical risk as market-relevant mainly if it disrupts energy.
  • Charles Schwab rates the energy sector neutral/market perform.
  • Oil is described as massively oversupplied, with weak producer economics.
  • Midterm election years historically show lower win rates and wider swings.
  • 2025 did not follow typical post-election-year seasonality.
  • S&P 500 cap-weighted returns mask churn and rotation at the average-stock level.
  • Sonders expects 2026 may bring less uniform market focus.
Ideas
Liz Ann Sonders Chief Investment Strategist, Charles Schwab 1:08
Energy sector neutral, not Venezuela bullish.
Schwab holds energy as neutral/market perform; Sonders says it is too late to significantly underweight the sector, and she would not upgrade it to outperform just because of Venezuela given weak oil economics and massive global oversupply.
XLE HIGH
Liz Ann Sonders Chief Investment Strategist, Charles Schwab 1:22
Oil oversupplied; prices may fall sharply.
Sonders expects oil prices could fall sharply in late 2026 into 2027 because the global oil market is massively oversupplied, current prices make the economics difficult for producers, and major producers are not clamoring to invest in Venezuela despite the geopolitical change.
WTI HIGH
Liz Ann Sonders Chief Investment Strategist, Charles Schwab 2:16
Midterm year: flat with wider swings.
The AI-led market is a tale of two markets: cap-weighted indexes like the S&P 500 mask significant churn and rotation beneath the surface, with average S&P 500 members experiencing bear-market-level maximum drawdowns since the April 8 closing low; Sonders thinks 2026 may bring less uniform index focus.
SPY MED
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This CNBC video, published January 05, 2026, features Liz Ann Sonders discussing XLE, WTI, SPY. 3 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Liz Ann Sonders  · Tickers: XLE, WTI, SPY