Morgan Stanley strategists, in a memo they passed, stated that there will be a slight excess in oil supply in the first quarter of 2023, and they predicted a $5 decrease in prices. In a memo, Morgan Stanley strategists, including Martijn Rats and Amy Sergeant, cut their price projections for Brent oil and US crude oil by $5 to $95 and $92.5, respectively, for the first quarter of 2023.
“Our assessment points to a slight oversupply in the first quarter of 2023, supply-demand equality in the second quarter, and a supply gap in the second half of the year,” the strategists wrote in their note.
Bank strategists underlined that seven factors will determine the fate of the oil market. These factors were listed as follows:
- Recovery of the aviation industry
- reopening of China
- EU embargo on Russian oil
- Congestion in diesel
- View of US onshore oil
End of the introduction of strategic oil reserves
- Determined as the direction of capital expenditures.
In the report, it was emphasized that the expectations in the base scenario of the bank are that oil prices will increase next year every time there is uncertainty.