(Reuters) -Brent crude will likely retrace to around $60 per barrel by early next year, with the market being well supplied and geopolitical risk abating following the Israel-Iran de-escalation, Morgan Stanley said in a note on Monday.
The bank added it sees robust supply growth from non-OPEC countries over 2025-26 in the order of 1 million barrels per day each year, which would be enough to meet demand growth in the period.
“But OPEC continues to unwind its production quota cuts, and we still expect an oversupply of ~1.3mb/d in 2026,” the bank said.
The Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, in May agreed to another increase of 411,000 barrels per day of oil for July, bringing the total increases made or announced since April to 1.37 million bpd.
Meanwhile, analysts have marginally lifted their oil price forecasts after the flare-up of tensions in the Middle East, but rising OPEC+ supply and a tempered demand outlook continue to weigh on crude, a Reuters poll showed on Monday.
Brent futures settled down 16 cents, or 0.2%, to $67.61 a barrel on Monday, while U.S. West Texas Intermediate crude settled down 41 cents, or 0.6%, at $65.11 a barrel.
(Reporting by Anjana Anil in Bengaluru; editing by Edward Tobin)
Comments