Morgan Stanley believes in higher oil prices

Morgan Stanley believes in higher oil prices

US crude has fallen more than 10 percent this year as a result of negative sentiment linked to weak demand and record production outside OPEC.

The February contract for West Texas Intermediate (WTI) crude oil fell 0.17 percent on Friday to close at $71.65 a barrel. Fat Friday. The Brent contract fell 0.14 percent and closed at $77.04 a barrel. barrel.

CNBC He writes that US crude oil and the global index recorded the first annual decline in prices since 2020, despite the geopolitical risks in the Middle East and the conflict in Gaza. This year, WTI is down 10.73 percent, while Brent is down 10.32 percent.

Oil prices rose about three percent earlier this week on fears that militant attacks on ships in the Red Sea could disrupt global trade and crude oil shipments. Although there is an underlying risk and fears of escalating conflict leading to small price increases, in 2023 traders mostly focused on the balance between supply and demand.

“If you look at the oil curve now, we are in a tight spot,” he added. “It is negative for the market, because it tells us that the market is not tight enough,” hedge fund manager Tor Sveland recently told Finansavisen.

Record high US production

The United States is producing oil at a record pace, and is estimated to have pumped 13.3 million barrels per day last week. Production also reached a record level in countries such as Brazil and Guyana. At the same time, non-OPEC production has faced an economic decline in large countries, such as China.

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OPEC and its allied countries promised to reduce production by 2.2 million barrels per day. Today is the first quarter of 2024, but traders do not seem to have confidence that this will be enough to balance the market.

The International Energy Agency believes that non-OPEC oil production, especially the United States, is expected to cover demand growth in 2024. Global oil demand growth is expected to fall by half to 1.1 million barrels per year. The next day next year, while non-OPEC production is expected to grow by 1.2 million barrels per day on.

Morgan Stanley believes in $80

The shift in crude oil supplies from the Middle East to the United States and other countries on the Atlantic Ocean is having a “profound impact on global oil trade,” according to the International Energy Agency.

The United States accounted for two-thirds of the growth in non-OPEC supplies this year, posing a challenge to attempts by Middle Eastern producers to defend their market share and boost oil prices.

OPEC appears to have little influence, with production cuts not being heard. Brazil has joined OPEC, but it is unclear what this means for the markets.

Occidental CEO Vicki Holub told CNBC that production this year in the United States has reached surprising levels. She advised the industry to be careful not to add too much supply to the market.

The CEO of Occidental and Morgan Stanley expects U.S. crude oil prices to rebound next year, averaging about $80 per barrel. A barrel of West Texas Intermediate crude. Wells Fargo has a lower forecast, averaging $71.50 per share. barrel.

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