Due to geopolitical concerns, Morgan Stanley has increased its projection for the price of Brent crude oil for the third quarter of this year by $4 per barrel, to $94. In a recent note, the top investment bank stated, “That the degree of geopolitical risk in key oil producing regions has increased recently seems clear and uncontroversial.”
Amid worries that the ongoing conflict could impair supplies from the crucial Middle East producing region, chances that talks between Israel and Hamas would result in a truce in Gaza evaporated, and Brent crude futures surged to just over $90 a barrel last week.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, led by Russia, have maintained their policy of oil supply stability and are pressuring certain nations to enhance their adherence to output reductions. This has coincided with an increase in crude prices.
Morgan Stanley stated that it anticipates pressure in the second and third quarters due to OPEC supply constraints, potential negative effects on Russia’s output, and an impending seasonal increase in demand.
