Oil Market Likely to Be in Surplus Next Year, Morgan Stanley Says.
Morgan Stanley predicts that the current tightness in the crude oil market will ease next year, leading to a surplus, with Brent prices expected to decline to the mid-to-high $70s range. The bank’s report, dated Friday, indicates that while the market will remain tight for most of the third quarter, equilibrium will return by the fourth quarter as seasonal demand decreases and both OPEC and non-OPEC supply increase.
OPEC+ is unlikely to change its output policy at its mini-ministerial meeting next month, maintaining the plan to start unwinding one layer of oil output cuts from October, according to three sources who spoke to Reuters. Morgan Stanley forecasts that OPEC and non-OPEC supply will grow by about 2.5 million barrels per day (bpd) in 2025, outpacing demand growth.
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Refinery runs are expected to peak in August this year and not reach similar levels until July 2025. Morgan Stanley left its third-quarter 2024 Brent crude price forecast unchanged at $86 per barrel, a projection also maintained by Goldman Sachs. As of Monday, Brent crude prices were up 0.54% at $83.08 a barrel, and U.S. West Texas Intermediate crude futures were up 0.54% at $80.56.
