(Nov 3): Morgan Stanley raised its near-term forecast for crude oil prices following Opec+’s decision to pause production hikes.
The Wall Street bank said on Monday that it was lifting its Brent estimate to US$60 (RM251.85) a barrel for the first half of 2026, up from US$57.50. The Organization of the Petroleum Exporting Countries and its allies (Opec+) said on Sunday that they plan to halt output increases in the first quarter of next year, the first pause since they began restoring halted supplies in April.
“Even if the Opec announcement does not change the mechanics of our production outlook, it does send an important signal,” analysts including Martijn Rats and Charlotte Firkins said in the note. “With Opec involvement, volatility is reduced.”
There is also a “substantial gap opening up” between Opec quotas and production, Morgan Stanley said. The bank’s estimates show a 500,000 barrel-a-day increase in the group’s output in the March to October period, far below the announced 2.6 million barrels a day of quota hikes.
Brent rose to trade near US$65 a barrel on Monday. Prices have slid 13% this year, on signs that an anticipated oversupply is starting to emerge. The glut should even out in the second half of 2027, and see prices rise back to US$65 during this time, Morgan Stanley said.
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