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Morgan Stanley predicts oil prices will fall to around $70 next year

2024-07-23

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Morgan Stanley said it expects oil prices to fall to around $70 a barrel next year as the market is oversupplied.

The current tight supply in the oil market is holding the price range at $80 a barrel, but the market will return to balance as seasonal demand begins to weaken in the fourth quarter, Morgan Stanley said in a report published on Monday (July 22).

The market will reach balance by the fourth quarter of 2024, "when seasonal demand weakens and OPEC and non-OPEC supply growth resumes," Morgan Stanley analysts wrote.

The bank's commodity strategists believe the market will even be in surplus next year as supply from OPEC+ and non-OPEC+ producers increases.

The bank said global refinery runs will reach their 2024 peak in August and are not expected to reach that level again until July next year.

That's why Morgan Stanley expects Brent crude prices to fall from current levels to around $70 a barrel to around $70 in 2025.

Morgan Stanley reiterated its forecast of $86 a barrel for Brent crude in the third quarter of 2024 in the report.

Goldman Sachs also recently reiterated its expectations from June

Brent crude prices will rise to $86 a barrel this summer due to strong consumer demand, which will leave the market with a considerable supply gap in the third quarter.

OPEC+ representatives told Bloomberg last week that OPEC+'s oil market monitoring group, the Joint Ministerial Monitoring Committee (JMMC), is not expected to recommend any changes to the group's current production policy plan in August.

According to Bloomberg's anonymous sources, when the panel meets again on August 1, it is expected to be a routine meeting and no recommendations are expected to be issued except for the oil production policy already announced by the OPEC+ group.

The above information is provided by special analysts and is for reference only. CM Trade does not guarantee the accuracy, timeliness and completeness of the information content, so you should not place too much reliance on the information provided. CM Trade is not a company that provides financial advice, and only provides services of the nature of execution of orders. Readers are advised to seek relevant investment advice on their own. Please see our full disclaimer.

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Morgan Stanley predicts oil prices will fall to around $70 next year

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