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Morgan Stanley Raises Brent Price Forecast for the Third Quarter to $120 a Barrel Due to Low Inventories

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March 17 (Reuters) – Morgan Stanley made plans for oil prices, citing a “relentless drawdown in global inventories” and lower production from Russia, and projected Brent crude at $120 a barrel in the third quarter.

“As inventories are already at multi-year lows, we expect this to continue to put upward pressure on oil prices,” the entity said in a March 16 note.

The bank raised its Brent price forecasts to $120 and $110 a barrel for the last two quarters of the year, respectively, from $100 previously estimated.

In addition, the crude oil forecast for 2023 is revised to $100 per barrel from $95.

“We have lowered our production estimate for Russia by one million barrels a day, which is a drop from 11 million bpd to 10 million bpd from April,” the bank added.

Brent crude futures were trading at $102 a barrel on Thursday, after the International Energy Agency said 3 million barrels per day (bpd) of Russian oil and products could be off the market as early as next month.

The bank also recorded its 2022 oil demand growth forecast to 3.4 million barrels per day (bpd) from the previous 4.0 million bpd, due to a resurgence of COVID cases in China.

He also forecast a 1 million bpd growth in Iran’s supply in the second half of 2022 for a possible nuclear deal that would release the Islamic republic’s crude to the market.

(Information from Seher Dareen in Bengaluru; Edited in Spanish by Javier Leira)

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