Morgan Stanley analysts said that given the recent decline in oil inventories and expectations of a balanced oil market this year, they now predict that the price of Brent crude oil will average $82.50 per barrel in the first and second quarters. Previously, they had forecast prices at $80 and $77.50, respectively. Meanwhile, the forecast for the third and fourth quarters was raised to $80 per barrel.
"Recent events signal that the oil market has turned out to be more tight than we initially expected. Supply has been lower than expected, partly due to OPEC but also due to the U.S," the analysts said, adding that the forecast for non-OPEC supply growth was reduced by 0.2 million barrels per day, to 1.5 million barrels, and the forecast for global demand growth was increased by 0.2 million barrels per day, to 1.5 million barrels.
"As OPEC compliance has been encouraging so far, the oil market is likely to remain balanced in 2024, which should keep Brent oil prices in the range of $80-$85 per barrel," analysts said.