Oil could be anchored near $80 a barrel according to a Morgan Stanley note from late last week.
The main points made are that:
- a more balanced oil market could be close by
- oil market is likely to remain in a deficit in the second of half of 2023 before returning to a small surplus next year.
- “We still see undersupply – and hence inventory draws – for the remainder of 3Q as well as 4Q. However, this turns into small builds in the early part of next year”
- “We suspect that the likely inventory trajectory anchors the market around $80/bbl, probably in a $75-85/bbl range”
- 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.
“Strong refined products markets and deep OPEC cuts have been supporting crude oil prices”. Counterveiling factors MS point out include:
- 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
Morgan Stanley raised its 2023 oil demand forecast to 2.1 mn barrels per day from 1.8 mn.
