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Morgan Stanley and HSBC revised down their expectations for an oil market surplus next year and forecast a Brent price of $70 per barrel, following a decision by Opec+ to delay and slow plans for higher output.
On Thursday, Opec+, which groups the Organisation of the Petroleum Exporting Countries and allies including Russia, postponed the start of oil output increases by three months until April.
It also said the cuts would take place until September 2026, nine months later than previously planned.
Morgan Stanley raised its Brent forecast for the second half of 2025 to $70 from $66-68 per barrel, the bank said in a note on Thursday.
The bank lowered its estimate for Opec-9 (Opec members minus Iran, Libya and Venezuela who are exempted from output curbs) production by 400,000 barrels per day (bpd) for 2025, and by 700,000 bpd by the fourth quarter of next year.
It also cut its estimate for Iran's production by about 100,000 bpd through 2025.
"In aggregate, this reduces our estimated surplus in 2025 from 1.3 to 0.8 million bpd in our total liquids balance, and from 0.7 to 0.3 million bpd in our crude-only balance."
HSBC maintained its Brent crude price forecast at $70 per barrel for 2025 and beyond, it said in a note on Friday.
It anticipates an oil market surplus of 0.2 million barrels per day in 2025 if Opec+ proceeds with planned production hikes in April. Previously, it expected a surplus of 0.5 million bpd.
Bank of America expects Brent oil prices to average $65 per barrel, assuming no significant increase in Opec+ production volumes in 2025.
"Demand growth has slowed this year and is expected to remain tepid in 2025 too, tipping the market into surplus next year," it said.
The weak demand outlook is the Achilles' heel for Opec+, the bank said, and forecast global oil demand growth averaging 1 million bpd this year and 1.1 million bpd next. -Reuters