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Morgan Stanley expects Brent prices to hit $ 70 a barrel in the third quarter on “signs of significant market improvement,” including better demand prospects.
“Conditions are favorable for the oil market at a faster pace than expected,” the bank said in a note Monday.
Morgan Stanley said: “New cases of Covid-19 are declining rapidly around the world, mobility statistics have bottomed out and are starting to improve, and in countries outside the Organization for Cooperation and Development economic development, refineries are already operating as strongly as they were before Covid-19. ”
The bank said the rapid reduction in stocks and rising price differentials in the North Sea market, among other factors, indicated an improvement in the market.
Morgan Stanley raised its forecast for second half Brent prices from $ 60 per barrel to a range of $ 65 to $ 70 per barrel, peaking at $ 70 in the third quarter.
The bank also raised its forecast for second-quarter Brent prices to $ 65 a barrel from $ 55, and raised its guidance for the fourth quarter to $ 65 from $ 60.
He said demand will likely improve by about four million barrels per day by the end of the year, inventories will return to normal and excess energy will experience a significant decrease.
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