Oil Supply Won't Come Back as Quickly as Expected, Babin Says
Speakers
Rebecca Babin
— Senior Energy Trader, CIBC Private Wealth
Summary
Rebecca Babin, Senior Equity Trader at CIBC Private Wealth, argues that oil markets are overly pessimistic, underpricing supply recovery challenges and demand rebound. She expects WTI to reach $75-$80 and Brent $80 by year-end, and sees 2027 surplus absorbed by stockpiling, keeping prices around $70-$75. Her view contrasts with more bearish consensus.
- Market overestimates speed of oil supply recovery and underestimates demand rebound.
- Near-term supply has been boosted by Iranian crude overhang and SPR releases.
- China rolling back export bans signals a pickup in crude demand.
- Year-end price targets: WTI $75-80, Brent $80.
- 2027 surplus of 4 million barrels/day likely absorbed by strategic stockpiling from India and China.
- WTI in 2027 expected to hover $70-$75, not crash.
- Upside risk if sanctions reimposed or supply recovery delayed.
- Bearish case from Iranian crude freely flowing is already largely priced in.
Ideas
Slower supply return and demand rebound favors oil
The market is overestimating the speed of oil supply recovery and underestimating a future demand rebound. Supply returns have faced fits and starts, with Iranian crude overhang and SPR releases providing temporary prompt supply. Demand, particularly from China, is set to recover as they roll back product export bans and resume inventory rebuilding. The risk/reward at current prices is skewed to the upside, with WTI and Brent expected to reach $75-80 and $80 respectively by year-end.
Up Next
This Bloomberg Markets video, published June 30, 2026, features Rebecca Babin discussing BNO, WTI. 1 trade idea extracted by AI with direction and confidence scoring.
Speakers: Rebecca Babin · Tickers: BNO, WTI