Add Morgan Stanley to the list of banks expecting crude to reach $100 a barrel later this year.
The bank expects stockpiles to slide even lower by the end of the year, after falling substantially in 2021, according to a research note to clients. Spare supply capacity will shrink to 2 million barrels a day from the current 3.4 million. Investment to boost supply capacity in the oil industry is expected to shrivel 30 per cent by the end of this decade as green initiatives progress.
Previously, the bank saw demand erosion starting once the global benchmark neared $90 a barrel. Now, it sees attrition happening at a higher level, because consumption in oil products has been resilient, the analysts, including Martijn Rats said in the note. For instance, jet demand is projected to grow 1.5 million barrels a day by this summer, while Google Mobility data reflects a sharp increase from the year prior.
Earlier this week, Goldman Sachs, one of the world’s top investment banks, said it saw Brent prices reaching $100 also in the third quarter because of a large supply deficit.
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