FX.co ★ Morgan Stanley anticipates uptrend in oil market in 2025

Morgan Stanley analysts are bullish about the crude oil market. Morgan Stanley has upgraded its forecast for Brent crude prices for the second half of 2025, stating that they expect "less oversupply in the oil market."

This revision follows the OPEC+ decision to delay plans for pumping up oil production. As a result, Morgan Stanley analysts raised their Brent price forecast for the second half of next year to $70 per barrel, compared to the previous range of $66–$68 per barrel.

On December 5, OPEC and its allies postponed the start of increased crude production by three months. This decision will remain in effect until April 2025. The cartel announced production cuts extended until September 2026—nine months later than previously planned.

In response, Morgan Stanley reduced its 2025 production estimate for OPEC-9 by 400,000 barrels per day. This group includes all cartel members except Iran, Libya, and Venezuela, which are exempt from production limits. By the fourth quarter of next year, the reduction is expected to reach 700,000 barrels per day.

Additionally, the production estimate for Iran was lowered by 100,000 barrels per day. Considering the situation holistically, the bank reduced its forecast for oil oversupply in 2025 from 1.3 million barrels to 0.8 million barrels per day, Morgan Stanley noted.

Last week, Brent crude traded at $71.35 per barrel. Benchmark oil grades plunged by nearly 1% for the week.