UBS lifts Brent forecast to $95 as Middle East supply risk persists

Energy stocks gain as analysts weigh autos, steel and shipbuilders

UBS analysts raised their year-end Brent crude forecast to $95 a barrel from $85 on Tuesday, pointing to “lower global exports, falling oil inventories and geopolitical risks in the Middle East.” The bank also noted that Chinese crude imports have recovered from their June lows, suggesting stronger demand in the coming months, and projected Brent would trade at $90 a barrel by March 2027.

The forecast shift came as oil benchmarks climbed on supply fears. Brent rose 1.8% to $98.74 a barrel in European morning trading, while WTI futures gained 3.1% to $94.32. The price moves pushed European energy majors higher: BP added 1.4%, Shell gained 0.9%, Norway’s Equinor rose 1.3%, Italy’s Eni climbed 1.1%, and Spain’s Repsol advanced 1%.

In Malaysia, Affin Hwang IB analyst Ong Tze Hern noted the country’s oil and gas sector trades at 10 times forward price-to-earnings, below historical levels, but said a broad-based re-rating could remain limited until domestic job flows improve. He raised his 2026 Brent forecast to $85 a barrel from $81 but projected Brent at $70 in 2027 as Middle East supply normalizes.

Citi endorsed Volkswagen’s restructuring agreement, calling the unanimous management backing a meaningful step toward securing the German automaker’s future. “Whilst the operating conditions remain very tough, at least VW has a plan,” Citi analysts wrote, raising their target price to €100 from €94 and maintaining a buy rating. Shares closed at €81.25.

In Asia, NH Investment & Securities initiated coverage of Hyundai Steel with a buy rating and a 400,000-won target price, citing the effect of anti-dumping duties on low-cost Chinese imports. Hot-rolled steel prices are up 26% and cold-rolled up 15% year-to-date in South Korea, analyst Y.K. Choi wrote, projecting Hyundai’s operating profit to jump 53% in 2026 and 72% in 2027. Shares were last up 2.9% at 33,350 won.

Lee Jae-hyuk at LS Securities said HD Korea Shipbuilding & Offshore Engineering is positioned to benefit from strong growth at its subsidiaries, with the share of higher-end LNG and LPG carriers in the lineup expected to expand through 2029 at the unlisted subsidiary HD Hyundai Samho, which posted an industry-leading 22.5% operating profit margin in the second quarter. LS maintains a buy rating and a 440,000-won target price; shares closed 1.4% lower at 346,500 won.

In U.K. transport, Berenberg analysts Jack Cummings and Luka Trnovsek called Mobico’s second-quarter performance update “encouraging,” noting revenue growth accelerated to 5% and management reiterated adjusted operating profit guidance of £215 million to £230 million. They maintained a Hold rating and a 35-pence price target, awaiting evidence of a sustained turnaround in the U.K. Coach business and a clear path to deleveraging. Shares were up 1.9% at 23.82 pence.

RBC Capital Markets analysts Ruairi Cullinane and Jakub Glinkowski saw strong top-line trends at Mobico driven by growth at ALSA and German Rail, but said the operator continues to face challenges in the U.K., where passenger numbers are down in both Bus and Coach. They said second-quarter revenue growth is unlikely to be a major share driver given unchanged operating profit guidance. Shares were up 2.7% at 24.02 pence.

Citi also weighed in on Wildcat Infrastructure’s engagement with military shipbuilder Austal, which has been weighing a bid by South Korea’s Hanwha for its U.S. operations. Analyst Sam Teeger noted that Hanwha’s effective 19.9% stake “may represent a significant hurdle to any competing proposal.” Citi expects Hanwha to be the more logical buyer, writing that “if the U.S. administration’s objective is to accelerate naval shipbuilding capacity, Hanwha’s extensive shipbuilding expertise appears an advantage, albeit with the caveat that its defense experience has largely been in Korea rather than U.S.” Citi maintains a buy rating on Austal.