Investing.com — Bernstein told investors in a note on Thursday that it sees $75 per barrel as a reasonable long-term oil price assumption for equity valuation, citing a new survey of the 50 largest listed oil and gas companies globally that points to rising marginal costs and a declining reserves outlook.
Analyst Neil Beveridge estimated that the global oil marginal cost fell 2% in 2025 to $69 per barrel, driven largely by a 14% drop in production costs.
However, Bernstein expects that figure to climb to $77 per barrel in 2026 as higher spot prices and a tighter physical market push cost inflation through the supply chain.
The firm said the $75 target is “consistent with our US$75/bbl as a reasonable long-term oil price assumption for equity valuation, above the current 60-month forward strip of US$70/bbl.”
The survey also found that the industry’s net income breakeven stands at $50 per barrel, with global unit production costs declining 5% to $35 per barrel of oil equivalent.
Industry returns on average capital employed fell to 10% last year, in line with the long-term average and cost of capital.
On reinvestment, Bernstein flagged a structural concern. The industry reinvestment ratio stood at 61% in 2025, and while that marks a recovery from a trough of 36% in 2022, it remains well below the historical 80% to 90% range, “reflecting a more cautious outlook on long-term demand,” the firm said.
Reserves life hit a 20-year low of 10.4 years, against a long-term average of 13 years, which Bernstein said could represent a bullish signal for prices over time.