Forecasts oil prices to remain elevated around USD 90 a barrel and gold rising to USD5,300/oz through 4Q26
DUBAI, UAE, September, 2026 — DBS Bank, Southeast Asia’s largest bank by assets, says markets are missing a critical risk in the race to power AI. As attention centres on securing the energy needed for AI-driven growth, investors are underpricing the threat of a renewed oil shock that could make energy supply more costly, volatile and difficult to secure.
“The margin for error in global energy markets is narrowing,” said Hou Wey Fook, Chief Investment Officer, DBS Bank. “Years of underinvestment have reduced the oil industry’s capacity to respond to disruptions, just as demand is set to rise. We estimate that reserve life at integrated oil majors has fallen by about a third from its 2014 peak, while AI-related capital expenditure is expected to remain at around USD 1 trillion a year over the next few years, driving substantial demand for power and energy infrastructure.”
“AI may be powered by computing, but its growth ultimately depends on access to sufficient, reliable energy. Oil is part of a broader energy system that will have to support rising power demand while maintaining energy security. This creates investment opportunities across the energy supply chain, from traditional hydrocarbons to power generation and grid infrastructure. In fact, we expect energy security to rank alongside AI as a major investment theme in the coming years, with stocks now trading at low-teens earnings multiples.”
DBS remains fully invested in AI-related exposure, even as market gains have become increasingly concentrated, with the top 10 AI stocks generating about c.78% of index gains. “Enterprise AI adoption and demand for AI tokens continue to accelerate, supporting sustained demand for computing capacity and infrastructure investment,” explained Hou. “We therefore recommend maintaining exposure across the AI value chain, including upstream technology suppliers, semiconductor innovators, power utilities and grid beneficiaries, as well as companies positioned to benefit from inference and enterprise deployment.”
On oil prices, DBS forecasts Brent to average around USD 90 a barrel in the third quarter of 2026. Assuming an eventual resolution to regional tensions, it expects prices to ease to about USD 86.50 in the fourth quarter. However, should escalations continue, oil prices could sustain well above USD 100 a barrel for the rest of the year. While the Strait of Hormuz remains the main risk factor, additional risks in the Bab-el-Mandeb Strait are also emerging, and prolonged disruptions along these critical routes for energy exports could push oil prices and inflation higher.
On gold, DBS maintains a positive long-term view despite recent volatility linked to speculative positioning. It forecasts gold prices of USD5,000 an ounce in the third quarter of 2026, rising to USD 5,300 by the fourth quarter. “Our view on gold is based on longer term trends, including fiscal sustainability concerns, de-dollarisation and monetary debasement, rather than short-term price movements. For investors in this region, preserving purchasing power and adding resilience to portfolios remains an important conversation,” added Hou.
On bonds, DBS remains focused on investment-grade credit, with an average portfolio duration of five to seven years. This positioning seeks to capture income while limiting the potential price decline from higher yields.
“The old playbook of stocks and bonds moving in opposite directions no longer holds as reliably as it once did. Investors should look beyond these two asset classes and consider gold, commodities, and selective exposure to markets such as China, as part of a more diversified portfolio,” Hou concluded.
DBS recommends adding gold, commodities and China ‘A’ shares as additional sources of diversification, and is also overweight Asia ex-Japan equities and private markets.
The bank continues to advocate its Barbell Strategy, combining income-generating assets with long-term growth exposure. The strategy has consistently outperformed its peers since inception in 2019, delivering an annualised return of 9% as of 9 September 2026.
About DBS:
DBS is a leading financial services group in Asia with a presence in 19 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank’s “AA-” and “Aa1” credit ratings are among the highest in the world.
Recognised for its global leadership, DBS has been named “World’s Best Bank” by Global Finance, “World’s Best Bank” by Euromoney and “Global Bank of the Year” by The Banker. The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named “World’s Best AI Bank” by Global Finance, “World’s Best Digital Bank” by Euromoney and the winner of multiple digital assets awards. In addition, DBS has been accorded the “Safest Bank in Asia“ award by Global Finance for 17 consecutive years from 2009 to 2025.
DBS provides a full range of services in Consumer, Wealth, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets.
DBS is committed to building lasting relationships with customers, as it banks the Asian way. Through the DBS Foundation, the bank creates impact beyond banking by uplifting lives and livelihoods of those in need. It provides essential needs to the underprivileged, and fosters inclusion by equipping the underserved with financial and digital literacy skills. It also nurtures innovative social enterprises that create positive impact.
With its extensive network of operations in Asia and emphasis on engaging and empowering its staff, DBS presents exciting career opportunities. For
