• 4 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 7 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 11 minutes Magic of Shale: EXPORTS!! Crude Exporters Navigate Gulf Coast Terminal Constraints
  • 14 minutes Wonders of Shale- Gas,bringing investments and jobs to the US
  • 1 hour Is $60/Bbl WTI still considered a break even for Shale Oil
  • 21 mins Evil Awakens: Fascist Symbols And Rhetoric On Rise In Italian EU Vote
  • 10 hours Prosecutors Fine Bosch 90 Million Euros For Emissions Cheating Role
  • 1 hour Trump needs to educate US companies and citizens on Chinese Communist Party and People's Liberation Army. This is real ECONOMIC WARFARE. To understand Chinese warfare read General Sun Tzu's "Art of War" . . . written 500 B.C.
  • 11 hours Apple Boycott in China
  • 1 hour Asia Oil Refiners Mull Run Cuts With Margins At 16 yrs. Low For Season
  • 42 mins Level-Headed Analysis of the Future of U.S. Shale Oil Industry
  • 5 hours Devastating Sanctions: Iran and Venezuela hurting
  • 1 hour IMO 2020 could create fierce competition for scarce water resources
  • 1 hour IMO2020 To scrub or not to scrub
  • 10 hours Misunderstanding between USA and Iran the cause of current stand off, I call BS
  • 7 hours Trump bogged down in Mideast quagmire. US spent $Trillions, lost Thousands of lives, and lost goodwill. FOR WHAT? US interests ? WHAT INTEREST ? . . . . China greatest threat next 50 years.
  • 10 hours California's Oil Industry Collapses Despite Shale Boom
Vietnam Is On The Verge Of An Energy Crisis

Vietnam Is On The Verge Of An Energy Crisis

As Vietnam looks down the…

Oil Markets Must Prepare For Maximum Fear

Oil Markets Must Prepare For Maximum Fear

Oil prices this week are…

Morgan Stanley Predicts Plummeting Oil Prices - $35 Likely

Oil Rigs

The price of oil will likely continue to falter in the latter half of this year amid an oversupply of gasoline, according to a Morgan Stanley study published last Sunday.

The Morgan Stanley analysts predicted numerous “worrisome trends” for the supply and demand of oil, chief of which is an excessive production of gasoline by refineries. The study’s authors believe that faced with the need to cut back on capacity utilization to protect profit margins, these refineries will cut back on crude oil purchases and drag prices lower in an attempt to protect profit margins.

“Crude oil demand is trending below refined product demand for the first time in three years…Given the oversupply in the refined product markets, fading refinery margins, and economic run cuts, we expect crude oil demand to deteriorate further over the coming months,” the report detailed.

Oil prices have fallen by more than US$8 in the past few weeks to a rate of around US$45 per barrel this week, yet the experts implied the price of crude could reach as low as US$35 per barrel.

The “bearish bias” by Morgan Stanley is the opposite of several bullish outlooks from institutions such as Goldman Sachs, which last May forecast an uptick in the price of crude this year.

At the time, the firm believed supply and demand in the oil market would rebalance itself earlier than expected. Since then, however, disruptions that affected the sector such as huge wildfires in Canada and a crippling strike by Kuwaiti oil workers have had a lesser impact on investors.

The concerns from Morgan Stanley’s analysts echo those of their counterparts from Citi. “Refinery margins are under pressure due to falling gasoline cracks as strong gasoline demand growth has been met by even stronger refinery supply…They believe that the elevated stock of crude and petroleum product, macro concerns, and a stronger U.S. dollar are all headwinds for oil prices,” according to Citi.

By Erwin Cifuentes for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News