Morgan Stanley has revised its oil price forecast for this year and next, considering the recent OPEC+ decision to cut production. Martijn Rats, chief commodity strategist at the bank, views the move as an indication that demand may not be strong in the coming months.
Morgan Stanley lowered its Brent Crude forecast for Q2 2023 to $85 per barrel, down from the previous estimate of $90, and reduced its Q3 and Q4 price estimates. Additionally, the bank slashed its 2024 Brent average forecast from $95 to $85 per barrel.
Citigroup shares the bearish view, citing U.S. supply growth and uncertainty in Chinese demand growth as factors keeping prices in check. Meanwhile, Goldman Sachs and Energy Aspects have become more bullish on the market after the OPEC+ announcement.
Goldman Sachs raised its Brent Crude forecast to $95 from $90 for the end of this year, and raised its Brent Crude forecast for 2024, projecting it to reach $100 at the end of the year, up from a previous estimate of $97.
Energy Aspects also turned bullish, with Amrita Sen, founder, and director of research, stating that the surprise OPEC+ cuts have made the oil market “insanely bullish” for later this year, if the global economy holds up.
Despite the differing opinions, the overall sentiment is that while $100 oil is not expected anytime soon, the oil market will remain fairly balanced due to a combination of supply growth and demand uncertainty.
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