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Brent prices to be well supported near $80/bbl, says Morgan Stanley

Brent prices to be well supported near $80/bbl, says Morgan Stanley

 

Morgan Stanley expects Brent crude prices to be well supported around $80 per barrel as the oil market is likely to remain in a deficit in the second of half of 2023 before returning to a small surplus next year.

"Strong refined products markets and deep OPEC cuts have been supporting crude oil prices," analysts at the bank said in a note dated Thursday.

Morgan Stanley raised its Brent price forecast for the third quarter to $85 per barrel from $75, and for the fourth quarter to $82.50 from $70. The global benchmark was trading around $84 a barrel on Friday.

Although OPEC's production cuts will have a bullish impact on oil prices in the near future, spare capacity is at its highest in 20 years and a decline in the group's market share could weigh on prices in the longer term, the bank said.

Saudi Arabia is extending its voluntary oil output cut of one million barrels per day into September, with the kingdom saying it could keep it in place beyond that and even deepen it.

Morgan Stanley raised its 2023 oil demand forecast to 2.1 million barrels per day from 1.8 million.

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Published: 25-08-2023

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