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Morgan Stanley expects Brent crude price to rise to about $110 a barrel by md-2023, supported by demand recovery and continued supply tightness.
“We remain constructive on oil prices driven by recovering demand with the reopening of China’s economy and the recovery of the aviation sector,” the US investment bank said in a research note.
Morgan Stanley said that the stronger demand will coincide with weak supply due to low levels of investment, risks to Russian supplies, the end of withdrawals from the strategic reserve, and the slowdown in the growth of US shale oil.
Macroeconomic headwinds will push the market into a slight oversupply and likely keep prices somewhat range-bound through the first quarter, the bank said.
But the market will return to balance in the second quarter of next year, before witnessing a shortage in supply by the second half of 2023, it added.
