Morgan Stanley raises Q3 Brent forecast to $120/bbl on low inventories

The bank also lowered its forecast for oil demand growth in 2022 to 3.4 million bpd from 4 million bpd on a resurgence of COVID cases in key consumer China

The bank also lowered its forecast for oil demand growth in 2022 to 3.4 million bpd from 4 million bpd on a resurgence of COVID cases in key consumer China

Morgan Stanley raised its oil price forecasts, citing a “relentless decline in global inventories” and lower production from Russia, and forecast Brent crude at $120 a barrel in the third quarter.

“With inventories already at multi-year lows, we expect this to continue to put upward pressure on oil prices,” it said in a March 16 statement.

The bank raised its Brent price forecasts for the last two quarters of the year to $120 and $110 a barrel, respectively, from the $100 previously estimated for both quarters.

In addition, the 2023 crude oil forecast has been revised down to $100 a barrel from the previous $95. “We have lowered our production estimate for Russia by one million barrels per day (mb/d) – down from 11 mb/d to 10 mb/d from April,” the bank added.

Brent crude futures traded at $102.02 a barrel by 0926 GMT after the International Energy Agency said 3 million barrels per day (bpd) of Russian oil and products could be locked in from next month.

But the bank also lowered its forecast for oil demand growth in 2022 to 3.4 million barrels per day (bpd) from a previous 4 million barrels per day (bpd) due to a resurgence of COVID cases in key consumer China.

It also forecast supply growth of 1 million barrels per day from Iran in the second half of 2022 due to a potential nuclear deal that would bring Iranian crude to the market.

But despite these risks to its forecast for higher prices, the bank kept its global demand estimate at “above consensus” 2.5 million to 3 million bpd as inventory data suggests “demand may already be higher than most balance sheets.” currently accept. ”

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