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Morgan Stanley analysts cut oil outlooks on recession fears

13 September 2022 13:38 (UTC +04:00)

Mounting fears of recessions in major economies, as well as China’s inability to throw off its virus shackles, have oil analysts slashing their price forecasts for the rest of this year, APA-Economics reports citing Bloomberg.

Morgan Stanley and UBS Group cut their near-term outlooks for crude by as much as $15 a barrel amid the deteriorating backdrop, and as Russian oil keeps flowing to Asia and elsewhere.

Brent crude has plunged by around a third since peaking in early March following Russia’s invasion of Ukraine. It’s tipped to drop further over the next few months, although it may rebound next year as economies rebound and less Russian crude makes it to market.

Here’s a summary of what analysts are saying:

Morgan Stanley

- Bank reduced its near-term outlook for Brent due to inflation and a sharp slowdown in demand, analysts including Martijn Rats said in a note.

- Cut price outlook for third quarter by $12 a barrel to $98 and lowered estimate for fourth quarter by $5 to $95. Maintained quarterly forecasts for 2023 at $100 and above as it sees a firmer market from the second quarter.

- Russian oil exports are likely to decline materially, with an estimated drop of 1.5 million to 2 million barrels a day into early 2023.