Energy
Today’s price sits at the 70.8th percentile of modeled fair value — 29% of modeled scenarios put fair value above the market.
- Median fair value
- 93.2
- Upside to median
- -6.8%
- Last close
- $144.08
- Confidence
- moderate-high
Return distributions, not point forecasts
Percentiles describe the spread of scenario outcomes under the stated method. The width of the range carries as much information as the midpoint.
One year
modeled- P90
- +28.0%
- P75
- +13.0%
- Median
- -4.0%
- P25
- -19.0%
- P10
- -34.0%
44% of modeled scenarios end positive.
The official forecast that Brent falls from roughly USD 90 in the second half of 2026 to a USD 74 average in 2027, partly offset by roll gains while the curve remains backwardated on a falling-inventory market, plus roughly 20% convergence of the modeled fair-value gap. Dispersion is set from realized crude return variance.
Three years, annualised
modeled- P90
- +11.0%
- P75
- +5.5%
- Median
- -1.5%
- P25
- -8.0%
- P10
- -16.0%
A marginal-cost anchor for crude with partial rather than full convergence to the official 2027 forecast, less an assumed roll drag once inventories rebuild and the curve flattens; producer-equity free cash flow is modeled at the lower commodity price.
Against the Treasury hurdle
- 1y Treasury
- 4.43%
- Expected excess
- -8.4%
- Basis
- direct
The modeled one-year median return is negative and sits 8.43 percentage points below the 1-year Treasury par yield. On this evidence a Treasury bill offers a plainly superior expected return at far lower uncertainty than commodity energy exposure.
5 in this asset class
| Symbol | Valuation | Fair value | Last close | 1y modeled |
|---|---|---|---|---|
| XLE US Energy Sector | -0.2Fair | 99.0 | $61.78 | -2.8% |
| XOP Oil and Gas Producers | -0.8Somewhat expensive | 96.0 | $181.61 | -3.4% |
| BNO Brent Crude Oil | -1.0Somewhat expensive | 94.5 | $57.91 | -3.7% |
| USO US Crude Oil | -1.2Somewhat expensive | 93.2 | $144.08 | -4.0% |
| UNG Natural Gas | -2.8Exceptionally expensive | 84.0 | $10.86 | -5.8% |