The price of oil from Morgan Stanley
2022.11.25 12:53
The price of oil from Morgan Stanley
Budrigannews.com – In a note to investors on Friday, analysts at Morgan Stanley said that there are seven unknowns about oil in 2023. The firm’s balance points to a slight oversupply until the end of the first quarter, a return to equilibrium in the second quarter, and a deficit in the second half of the year.
They explained that the recovery of the aviation industry, China’s reopening, the EU’s oil embargo on Russia, diesel tightness, the outlook for US shale, the end of SPR releases, and capital expenditure are all key uncertainties.
“If our base case expectations for each materialize, prices would typically benefit.The market would be left with the neutral status quo in the event that we are wrong.For the time being, macroeconomic headwinds are affecting the oil market.However, “looking into 2023, the factors below eventually skew risks in a positive direction,” the analysts wrote.
Global jet fuel consumption remains 2 mb/d below 2019 levels, according to analysts, and they anticipate a significant portion of this to return in the coming years.
As a result of lockdowns and other mobility restrictions, Morgan Stanley believes that China’s oil demand is currently 1 mb/d below 2020/21 levels.However, the company anticipates that China’s oil demand will begin to recover after the first quarter of 2023.
“The EU continued to import 2.4 mb/d of Russian oil in October.Russia will need to find additional buyers in the coming months, and the EU will need to find additional suppliers.”The analysts added, “Much of that can happen, but probably not completely, smoothly, quickly, and without affecting the price.”
On Friday, worries about lockdowns in China and a price cap on Russian oil have made their way into the market. Despite this, oil prices have managed to maintain some stability.
