Dec 14 (Reuters) – Morgan Stanley mentioned on Wednesday it expects Brent crude costs to rise to round $110 a barrel. barrel in mid-2023, citing help from rising demand and continued tight provide.
“We stay constructive on oil costs pushed by a restoration in demand (China reopening, aviation restoration) amid tight provide resulting from low funding ranges, dangers to Russia’s provide, finish of SPR releases and slowdown in US shale ,” the US funding financial institution mentioned within the word.
Oil costs rose on Wednesday after OPEC and the Worldwide Vitality Company (IEA) each forecast a restoration in demand over the subsequent 12 months.
Macroeconomic headwinds will push the market right into a slight oversupply and sure maintain costs considerably ranged by means of the primary quarter, the financial institution mentioned.
However Morgan Stanley oil strategist Martijn Rats sees the market returning to stability within the second quarter and tightening additional within the second half of 2023.
For US gasoline, the financial institution sees new provide exceeding demand subsequent 12 months, leading to a looser stability and posing a draw back danger to costs after the winter.
Reporting by Swati Verma in Bengaluru. Modifying by Jane Merriman
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