Investing.com - UBS has cut its Brent crude oil forecasts, with the Swiss bank citing key downside risks for its latest decision.

“OPEC+ is accelerating its production increase and we are likely to see weaker oil demand on the back of U.S. tariffs and lower global GDP,” UBS analysts said, in a note dated April 9.

The Swiss bank cut its Brent price forecast by $6 a barrel to $66 for 2025, by $7 to $66 for 2025, by $7 to $65 for 2026 and by $3 to $70 for 2027.

“Brent prices have already dropped ~20% to ~$60/bbl since the start of the month and while our base is low to mid-$60s the rest of the year, we expect significant volatility to remain a feature given the uncertainty around both tariffs/demand and OPEC+ policy,” UBS added.

At 08:35 ET (12:35 GMT), Brent oil futures expiring in June fell 2.5% to $63.85 a barrel, down almost 9% on the course of the last week.

The Swiss bank now expects the oil market to be in a surplus because of lower demand and higher production by the Organization of Petroleum Exporting Countries and allies, known as OPEC+.

“We see a wider Brent price range of $50-75/bbl for the near-term given the drivers of recent weakness could either reverse or turn out to be even more negative. Fears around oil demand could dissipate if tariff retaliations are avoided through the ongoing negotiations. Conversely, we see further downside risk in the event of a severe recession,” the Swiss bank added.

UBS expects OPEC+ to keep production flat post the May increase, but ongoing increases could drive prices down to $50/bbl before we see a faster slowdown in non-OPEC supply.

Greater U.S. pressure on Iran has the potential to send Brent back above ~$70/bbl, but discussions over a potential deal are due to take place this weekend, further complicating the picture.