Oil rose by about 18% this year, supported by geopolitical tensions and OPEC+ supply cuts. Many of the world’s largest traders and Wall Street banks have turned to adopting a bullish tone for prices, and some see a possible return to $100 for global Brent crude. However, the Macquarie Group said that crude oil will enter the bearish range in the second half, with recent gains unlikely to continue if geopolitical events do not lead to actual supply disruptions. Morgan Stanley raised its forecast for the price of Brent crude in the third quarter of 2024 by about 4. dollars per barrel to $94, due to geopolitical risks.
The bank said – in a note – that geopolitical risks in major oil-producing regions have increased recently. Brent crude futures rose to just over $90, after hopes faded that talks between Israel and Hamas would lead to a ceasefire in Gaza and amid fears that the ongoing conflict could disrupt supplies from the Middle East. OPEC+, a group that includes members of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, last week kept its oil supply policy unchanged and pressured some countries to increase compliance with production cuts.
Morgan Stanley said that in light of OPEC supply constraints, some bearish factors for Russian production, and the expected seasonal rise in demand, it expects a shortage in supply during the second and third quarters. A NATO official said earlier this month that Ukrainian strikes on Russian refineries may have knocked out 15% of their production capacity. Oil is above $90
The rise is due to political tensions
OPEC Plus supports the market with cuts
Raising expectations by $4 per barrel
Oil market
