• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 5 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 4 days The United States produced more crude oil than any nation, at any time.
  • 9 days e-truck insanity
  • 4 days How Far Have We Really Gotten With Alternative Energy
  • 8 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 7 days James Corbett Interviews Irina Slav of OILPRICE.COM - "Burn, Hollywood, Burn!" - The Corbett Report
  • 7 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 9 days Biden's $2 trillion Plan for Insfrastructure and Jobs
  • 9 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 12 days Bankruptcy in the Industry
Oil Prices Projected to Remain Below $80 in 2024

Oil Prices Projected to Remain Below $80 in 2024

Analysts predict that U.S. benchmark…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Morgan Stanley Expects $40 Brent By Christmas

North Sea

Morgan Stanley expects Brent crude to trade at $40 a barrel by the end of the year thanks to the recovery in demand, which has taken off faster than the bank expected, it said as quoted by Reuters.

“We expect demand to rebound to about 97 million barrels per day (bpd) by Q4 as economies come out of lockdown - a significant improvement although still down about 4 million bpd year-on-year,”

But Morgan Stanley analysts are going further: thanks to production cuts in OPEC and outside it, the oil market could swing into an undersupply in the last quarter of the year, to persist during the first quarter of 2021 as well. The size of the supply shortage would be about 4 to 6 million bpd.

“Now that the rebalancing has been set in motion, we expect it to continue. Our base case forecasts call for a further tightening of the oil market over the next few quarters,” the bank said.

Optimism is indeed returning to oil, although it remains guarded. Russia’s Energy Minister Alexander Novak recently said he expected supply and demand to rebalance by July, with the supply overhang at 7 to 12 million bpd.

And yet nothing is certain.

“Whether the feared second round of covid-19 will emerge is a crucial question, but even if it does you could surmise that there won’t be such a sharp crash by oil again anytime soon,” said Exness market analyst Michael Stark in comments on the market situation. “With so much production having been cut and the public’s patience running really thin with lockdowns in many countries, the same kind of double shock to both supply and demand isn’t very likely.”

Demand for oil has begun recovering thanks to the easing of lockdowns across most of the world but there are doubts it will rebound to pre-crisis levels as people’s habits change, including in the transport aspect. Yet supply cuts appear to have done their job in stimulating prices. These, according to Russia’s Novak, have reached 15 million bpd. In the U.S. alone, producers have cut up to 1.4 million bpd, pressured by the circumstances.

OPEC+ is meeting next month to discuss whether to increase the current cuts—9.7 million bpd—or ease this to 7.7 million bpd as initially agreed.

By Irina Slav for Oilprice.com

ADVERTISEMENT

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Maxander on May 27 2020 said:
    Morgan Stanley's expectation of crude oil prices is on very very conservative side. Most probably because Morgan Stanley doesn't want crude oil brent or WTI to cross $40 per barrel because if it is supposed to, then most investors will move to energy commodities leaving behind Morgan Stanley's favorite tech, e-comm, social media EV pack in deep correction.
    I have a downgrade view on Morgan Stanley & is of the view that crude oil may touch or even cross $50 per barrel by 2020 end, given the production cuts by OPEC+, America, China

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News