Analysts Lower Oil Forecasts Amid Demand Slowdown

Yolowire 10-Sep-2024 9:58 AM

U.S. investment bank %MorganStanley (NYSE:MS) has become the latest Wall Street firm to lower its %Oil forecast amid growing concerns that demand for energy products is slowing worldwide.

Following a recent pullback that saw crude oil prices fall below $70 U.S. a barrel, Morgan Stanley has lowered its forecast for Brent crude oil, the international standard, to $75 U.S. from $80 U.S. and sees the price hovering near that level through the end of 2025.

In a note to clients, analysts at Morgan Stanley said they see a global demand slowdown similar to a mild recession in energy markets over the coming year.

Morgan Stanley isn’t the only Wall Street firm that is revising down its outlook for crude oil prices.

%Citibank (NYSE:C) and %BankofAmerica (NYSE:BAC) each recently said that oil prices could decline to $60 U.S. per barrel in 2025 due to weakening global demand and a sizable surplus of crude stockpiles.

Bank of America cited growing oil inventories as a significant risk to the price outlook, saying that plans by OPEC+ to delay planned production increases are unlikely to offset weak demand, notably in China, the world’s biggest importer of crude products.

Crude oil prices hit their lowest level since June 2023 last week as demand from China continues to soften amid an economic slowdown in the nation of 1.4 billion people.

West Texas Intermediate (WTI) crude oil, the U.S. standard, is currently trading at $67.82 U.S. per barrel. Brent crude oil, the international benchmark, is trading at $71 U.S. a barrel.