Morgan Stanley sees Brent hitting $100 by third quarter

Morgan Stanley building Source: Massimo Giachetti

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. 

© 2022 Bloomberg L.P.

Dear user, please be aware that we use cookies to help users navigate our website content and to help us understand how we can improve the user experience. If you have ideas for how we can improve our services, we’d love to hear from you. Click here to email us. By continuing to browse you agree to our use of cookies. Please see our Privacy & Cookie Usage Policy to learn more.