Morgan Stanley raised its forecast for the price of Brent crude in the third quarter of this year by $4 per barrel to $94, citing geopolitical risks.
The bank said in a note that “the degree of geopolitical risks in major oil-producing regions has increased recently and appears clear and indisputable.”
Brent crude futures rose to just over $90 a barrel on Tuesday, after hopes diminished that talks between Israel and Hamas would lead to a ceasefire in Gaza and amid fears that the ongoing conflict may cause disruption to supplies from the Middle East.
OPEC+, a group that includes members of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, last week kept its oil supply policy unchanged and pressured some countries to increase compliance with production cuts.
Morgan Stanley said that in light of OPEC supply restrictions, some bearish factors for Russian production, and the expected seasonal rise in demand, it expects a shortage in supply during the second and third quarters.
A NATO official said earlier this month that Ukrainian strikes on Russian refineries may have knocked out more than 15% of Russia's production capacity.
