Morgan Stanley expects Brent crude oil prices to advance to $100 a barrel in the second half of this year, with the market heading for a simultaneous "triple deficit" of inventories, spare capacity and investment.
"The key oil products markets (gasoline, jet fuel and gasoil/diesel) all show strong crack spreads, steep backwardation and inventories that have fallen to low levels. None of this signals weakness," it said in a note.
The bank raised its price forecasts for Brent crude to $100 a barrel for the last two quarters of the year, up from the $90 and $87.50 previously estimated for the third and fourth quarters respectively.
Brent crude futures were trading at about $88 a barrel on Friday, while U.S. West Texas Intermediate (WTI) crude was at $85. Both benchmarks are on track for a fifth consecutive weekly gain.
Morgan Stanley's projection chimes with those of other investments banks, including Goldman Sachs, in predicting oil prices could hit $100 per barrel this year.
Recommended Reading
Decoding the Delaware: How E&Ps Are Unlocking the Future
2024-05-01 - The basin is deeper, gassier, more geologically complex and more remote than the Midland Basin to the east. But the Delaware is too sweet of a prize to pass up for many of the nation’s top oil and gas producers.
Chevron CEO: Permian, D-J Basin Production Fuels US Output Growth
2024-04-29 - Chevron continues to prioritize Permian Basin investment for new production and is seeing D-J Basin growth after closing its $6.3 billion acquisition of PDC Energy last year, CEO Mike Wirth said.
Life on the Edge: Surge of Activity Ignites the Northern Midland Basin
2024-04-03 - Once a company with low outside expectations, Surge Energy is now a premier private producer in one of the world’s top shale plays.
Enverus: 1Q Upstream Deals Hit $51B, but Consolidation is Slowing
2024-04-23 - Oil and gas dealmaking continued at a high clip in the first quarter, especially in the Permian Basin. But a thinning list of potential takeout targets, and an invigorated Federal Trade Commission, are chilling the red-hot M&A market.
Gulfport Plans Liquids-rich Program After ‘Strong’ Ohio Oil Tests
2024-05-01 - Appalachia gas producer Gulfport Energy continues to report “strong oil production” from a two-well Hendershot pad drilled in eastern Ohio last year. Gulfport plans to develop additional liquids-rich opportunities this year as natural gas prices hover near record lows.