Wells Fargo raises oil price targets citing ongoing supply risks

Investing.com -- Wells Fargo Investment Institute raised its crude oil price targets for 2027 on Tuesday, citing ongoing supply disruptions and inventory rebuilding needs.

The institute increased its year-end 2027 target for West Texas Intermediate crude to $75-$85 per barrel from $70-$80. Brent crude's target moved to $80-$90 per barrel from $75-$85.

Wells Fargo analysts said they expect supply disruptions to gradually ease through 2027, but ongoing closure risks will add a premium to each barrel. The analysts also anticipate countries will rebuild depleted energy inventories from multi-year lows as supply conditions normalize.

"We expect prices to subside from recent highs but to remain above our previous targets through 2027," the analysts said.

The institute noted that persistent geopolitical risk and business technology spending appear likely to intensify inflation pressure. Wells Fargo expects the Federal Reserve to respond with additional interest rate increases, which should slow global economic growth.

Rising borrowing costs, reduced purchasing power, elevated fuel expenses, and fading fiscal support are also expected to slow the pace of business technology spending, which remains a strong U.S. economic growth driver.

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