Morgan Stanley bumped up its Brent price view for the second half of 2025 and said it now expects a smaller oil market surplus for the year following a decision by OPEC+ oil producers to delay and slow plans for higher output.
The bank raised its Brent price forecast for the second half of 2025 to $70 from $66-68 per barrel in a note dated Dec 5.
On Thursday, OPEC+, which groups the Organisation of the Petroleum Exporting Countries and allies including Russia, postponed the start of oil output increases by three months until April.
It also said the cuts would take place until September 2026, nine months later than previously planned.
The bank lowered its estimate for OPEC-9 (OPEC members minus Iran, Libya and Venezuela who are exempted from output curbs) production by 400,000 barrels per day (bpd) for 2025, and by 700,000 bpd by the fourth quarter of next year.
It also cut its estimate for Iran’s production by about 100,000 bpd through 2025.
“In aggregate, this reduces our estimated surplus in 2025 from 1.3 to 0.8 million bpd in our total liquids balance, and from 0.7 to 0.3 million bpd in our crude-only balance.”
Brent crude futures were trading near $71.88 per barrel on Friday, while U.S. West Texas Intermediate crude futures were near $68.15.
(Reporting by Anjana Anil in Bengaluru; editing by Jason Neely)