Morgan Stanley cuts its oil price forecasts again, citing faster-than-expected restoration of crude flows through the Strait of Hormuz and concerns about mounting supply versus demand. Multiple outlets report that the bank links the update to the strait reopening progressing quicker than analysts had expected, which supports higher available supply in the near term. At the same time, they highlight strong U.S. oil production, including record levels, as another factor weighing on prices. Several sources also point to weaker demand conditions, particularly in Asia, with Bloomberg and Financial Post noting softer Chinese demand.
PravdaReport adds that the bank frames the situation as “overproduction,” where additional supply risks overwhelming storage capacity and putting downward pressure on benchmark prices. According to PravdaReport, Morgan Stanley expects Brent crude to average $75 per barrel in both the third and fourth quarters of 2026, with further expectations of $70 by the end of 2027. Overall, the covered reporting emphasizes increased risk of a crude oil surplus and downside pressure on prices.
