Energy
Today’s price sits at the 60.0th percentile of modeled fair value — 34% of modeled scenarios put fair value above the market.
- Median fair value
- 97.5
- Upside to median
- -2.5%
- Last close
- $143.35
- 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
- +26.0%
- P75
- +13.0%
- Median
- -2.0%
- P25
- -16.0%
- P10
- -33.0%
45% of modeled scenarios end positive.
Blended across the class: the commodity sleeve carries the forecast decline in the Brent average from roughly $90 in the second half of 2026 to $74 in 2027 plus roll cost as inventories rebuild, while the producer-equity sleeve carries a dividend yield of roughly 3.3% and free cash flow valued at mid-cycle rather than spot prices. A further 30% of the modeled -2.5% fair-value gap converges within the year. The scenario-implied beat probability is diagnostic only and is read against the 4.58% one-year Treasury par hurdle.
Three years, annualised
modeled- P90
- +14.0%
- P75
- +8.0%
- Median
- +0.5%
- P25
- -7.0%
- P10
- -16.0%
Three-year path in which the crude price converges toward a mid-cycle $78 to $82 per barrel as Middle East export constraints ease from the second quarter of 2027 and US production rises from 13.8 to 14.3 million barrels per day, with producer-equity distributions and capital discipline providing the return floor.
Against the Treasury hurdle
- 1y Treasury
- 4.58%
- Expected excess
- -6.6%
- Basis
- proxy
The widest negative modeled edge in the report, at 6.58 percentage points below the 4.58% one-year Treasury par yield. This follows directly from an official forecast that the Brent average falls from about $90 to $74 between 2026 and 2027; a one-year Treasury pays 4.58% with no commodity price or roll-cost exposure.
5 in this asset class
| Symbol | Valuation | Fair value | Last close | 1y modeled |
|---|---|---|---|---|
| BNO Brent Crude Oil | -0.8Somewhat expensive | 96.0 | $58.75 | -2.4% |
| UNG Natural Gas | -2.7Exceptionally expensive | 84.0 | $10.35 | -5.4% |
| USO US Crude Oil | -0.6Somewhat expensive | 97.5 | $143.35 | -2.0% |
| XLE US Energy Sector | +0.1Fair | 102.0 | $61.54 | -0.9% |
| XOP Oil and Gas Producers | -0.2Fair | 100.0 | $178.63 | -1.4% |