Morgan Stanley has raised its Brent crude oil price forecast for the third quarter of this year by $4 per barrel to $94, citing geopolitical risks.
“That the degree of geopolitical risk in key oil producing regions has increased recently seems clear and uncontroversial,” the bank said in a note dated Monday.
Brent futures rose to just above $90 a barrel on Tuesday after hopes faded that talks between Israel and Hamas would lead to a ceasefire in Gaza amid concerns the lingering conflict could disrupt supply from the key Middle East producing region.
OPEC+, a group comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, last week kept its oil supply policy unchanged and pressed some countries to increase compliance with output cuts.
Morgan Stanley said that with OPEC supply restraints, some downside to Russia production, and a seasonal upswing in demand ahead, it expects tightness in the second and third quarters.
Ukrainian strikes on Russian refineries may have disrupted more than 15% of Russian capacity, a NATO official said earlier this month.