As we begin 2026, investors are shifting their expectations for oil prices, according to a recent survey by Bank of America Merrill Lynch. The findings indicate that on a weighted average basis, FMS investors anticipate oil to trade at $84/bbl by the end of the year, marking a 38% increase from the starting price of $61/bbl Brent. This significant jump in prices has also led to a change in investor sentiment, with 28% of respondents expecting oil to trade at $90/bbl or higher by year-end, compared to only 12% a month ago.

The shift in investor sentiment is likely due to several factors, including the ongoing global economic recovery and the increasing demand for energy. As businesses and industries continue to grow and expand, the need for energy sources such as oil remains high, driving up prices. Additionally, geopolitical tensions and supply chain disruptions can also impact oil prices, leading to increased volatility in the market.

The expected price increase is not limited to just oil, as investors are also optimistic about other energy sources. According to the survey, 63% of respondents expect natural gas prices to rise by the end of 2026, while 57% predict an increase in coal prices. These findings suggest that investors are becoming more bullish on the energy sector as a whole, as they anticipate a continued recovery in global economic conditions and increased demand for energy resources.

However, it is important to note that these expectations may not necessarily come to fruition. Oil prices can be volatile and subject to various external factors, including changes in global supply and demand, geopolitical events, and weather-related disruptions. As such, investors should exercise caution when making investment decisions based solely on survey results or market expectations.