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Oil Price Profit Taking: Morgan Stanley Foresees $100 Brent

Brent crude oil closed down approximately 2% at $92.32 in the last trading session. US WTI also fell to $85.65. This decline is seen as profit taking following two consecutive weekly increases of over 5%. Treasury Secretary Scott Bessent's announcement of expanded secondary sanctions against Iran did not affect prices, as it was already priced in by the markets.

Morgan Stanley's New Oil Price Forecasts

Morgan Stanley has revised its Brent oil price expectations upwards. The bank forecasts a price of $90 per barrel for the third quarter of 2026 and $100 per barrel for the fourth quarter. This forecast is based on the assessment that the recovery in Middle Eastern supply is progressing slower than expected and that the market may remain tight until the first half of 2027. Morgan Stanley analysts note that offshore oil inventories have decreased by approximately 170 million barrels since mid-July, with onshore inventories, including those in China, also declining.

Oil Risk for US Stocks

Morgan Stanley equity strategist Michael Wilson stated that a new surge in oil prices is the biggest risk for US stocks. Therefore, energy stocks could be used as a hedge in portfolios. This assessment highlights the pressure that rising energy costs could put on corporate profit margins and consumer spending.

Supply and Demand Balance

The International Energy Agency (IEA) has indicated that it is not currently considering a new strategic reserve sale option. Analysts note that the main impact of Iranian sanctions will depend on the extent to which shipments, particularly to China, will decrease. The unusually high trading volume of Gazoylin Brent indicates tightness on the refinery side.

This post is not investment advice and is for informational purposes only regarding market conditions.

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