Morgan Stanley raises year-end Brent oil price forecast to $40/bbl

Morgan Stanley has raised its year-end Brent crude oil price forecast to $40/barrel due to faster-than-expected recovery in supply dynamics and major output cuts in the energy market.

Global oil demand has started to pick up as global virus-led lockdowns have started to gradually ease down. Supply-demand dynamics are now on the path to find their way to pre-virus levels.

Morgan Stanley also cited OPEC’s deal and Saudi Arabia’s voluntarily production cut for its upward revision.

The bank added, “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.”