Polyestertime

Morgan Stanley Sees Oil Climbing To $90 By 2020 – Forget Iran and OPEC. There’s another issue that will keep oil prices supported for the next two years, according to Morgan Stanley’s oil outlook – Morgan Stanley Crude Oil $90 2020 - Arhive

Morgan Stanley Crude Oil $90 2020 Morgan Stanley Crude Oil $90 2020  Morgan Stanley Crude Oil $90 2020  Morgan Stanley Crude Oil $90 2020  Morgan Stanley Crude Oil $90 2020  Morgan Stanley Crude Oil $90 2020  Morgan Stanley Crude Oil $90 2020  Morgan Stanley Crude Oil $90 2020  

Morgan Stanley Sees Oil Climbing To $90 By 2020

Morgan Stanley Crude Oil $90 2020

Morgan Stanley expects the squeeze on oil supplies to get worse, pushing oil up to $90 by 2020. (©Tomasz Zajda/stock.adobe.com)

BLOOMBERG NEWS

Forget Iran and OPEC. There’s another issue that will keep oil prices supported for the next two years, according to Morgan Stanley’s oil outlook.

Brent crude will reach $90 a barrel by 2020 as new international shipping regulations take effect. The regulations will overhaul the types of fuels produced by refiners, the bank’s analysts said in a report.

The changes will force vessels to consume lower sulfur fuels beginning in January 2020. This will lead to a boom in demand for middle distillate products including diesel and marine gas oil, triggering the need for more crude, they said.

“We foresee a scramble for middle distillates that will drive crack spreads higher and drag oil prices with it,” wrote Morgan Stanley analysts including Martijn Rats.

Rules Add To Supply Cuts

Crude has already received a price boost due to OPEC supply cuts, geopolitical events and the U.S. decision to reimpose sanctions on Iran. The regulatory changes will add to the impact. Global benchmark Brent, which neared $80 a barrel earlier this week, is trading at the highest levels since late 2014. Futures for the January 2020 contract are at about $66.60 a barrel.

The International Maritime Organization’s rule changes will call for ships to reduce the maximum sulfur content of their fuels to 0.5%, from 3.5% in most regions currently. The goal is to curb air pollution that has been linked to respiratory diseases and acid rain. The changes are expected to create an oversupply of high-sulfur fuel oil while sparking demand for IMO-compliant products. This will put pressure on the refining industry to produce more of the latter fuels.

Middle distillate markets are already showing signs of tightness, according to Morgan Stanley.

Shale Oil Not Ideal

With the IMO ship-fuel regulations expected to boost demand by an additional 1.5 million barrels a day by 2020, traders will seek to get the right product supplies. This should boost crude prices, according to the bank. While global crude production will rise, it probably won’t increase by the 5.7 million barrels a day needed by 2020 to meet the additional demand, the analysts said.

“The last period of severe middle distillate tightness occurred in late-2007/early-2008 and arguably was the critical factor that drove up Brent prices in that period,” Rats wrote. Crude oil prices approached $150 a barrel in 2008.

U.S. oil output, now at a record, likely won’t come to the rescue. The crude pumped in America’s shale regions is light and not ideal for producing middle distillates, Morgan Stanley noted.

“We expect the crude oil market to remain undersupplied and inventories to continue to draw,” the bank said. “This will likely underpin prices.”

Related Topics

-Get ready for $100 a barrel oil and the conflict it represents – The geopolitical risk premium in oil has driven crude prices to nearly four-year highs and shows no signs of abating – $100 barrel crude oil

-Oil for $300. Is It Possible? – If major oil companies keep postponing the necessary investments, the next “huge supply shock” may bring the oil price up to $300 per barrel – Crude Oil $300 per barrel possible

-Oil eases as clock ticks down to Trump decision on Iran – Oil eased on Tuesday ahead of an announcement by U.S. President Donald Trump later in the day on whether the United States will reimpose sanctions on Iran, but the price held within sight of its highest in more than three years – Crude Oil Trump Iran

-Saudi Arabia Needs $88 Oil – Higher oil prices have provided a boost to the economies of oil-exporting nations such as Saudi Arabia – Saudi Arabia $88 Crude Oil

-BP says still sees oil at $50-$60/bbl in 2018 as shale output surges – BP expects benchmark oil prices to weaken in the second half of the year as U.S. shale production surges by up to 1.5 million barrels per day – BP crude oil $50 $60 barrel 2018 shale output

-Iran and the oil market – How Iran’s nuclear deal and a host of other factors are forging a new crude reality – Iran Crude Oil market

-Oil output cuts succeeded but future cloudy – There is a danger of Opec, non-Opec members exceeding their vision due to current rally in oil prices, energy expert says – Oil output cuts Opec nonOpec

-Who’s to blame for costly oil? Saudis, Russia and Trump himself – Rising oil prices are now the latest target in President Donald Trump’s cross-hairs. The nation’s tweeter-in-chief complained Friday about OPEC fueling – Blame costly oil Saudis Russia Trump

-Oil pulls back from gains; OPEC says glut nearly gone – Oil prices on Thursday hit highs not seen since 2014, built on the ongoing drawdowns in global supply and as Saudi Arabia looks to push prices higher, though U.S. crude gave back gains in the afternoon to finish lower – Crude Oil OPEC glut Saudi Arabia

-Escalating Middle East Tension Could Trigger Oil Prices To Hit $100 Per Barrel – Oil prices could soon soar to $100 per barrel amid growing fear about conflict in the Middle East, according to an oil analyst for CNBC – Oil Prices $100 Barrel

– IEA: OPEC Mission Near Completion as Oil Glut Vanishes – OPEC is on the verge of “mission accomplished” in its quest to clear the global oil glut that caused the worst industry downturn in a generation – IEA OPEC Crude Oil Glut

-Is Russia Cheating On The OPEC Deal? – After three months of steady output, Russia’s crude oil production increased in March to 10.97 million bpd, the highest level since April 2017, as the top two Russian companies boosted their production – Russia Cheating OPEC Deal

-Oil price crosses $70 amid Iran deal tensions – Oil prices rose as investors saw increasing possibility that the US could withdraw from the historic Iran nuclear deal – Crude Oil price dollars 70 Iran tensions

-Is $70 oil the new normal? – The global economy is poised to cope well even if oil prices will remain at around $70 per barrel throughout 2018, energy experts said – Dollars 70 barrel crude oil shale oil

-Will oil prices remain strong for the rest of the year? – The oil inventory trajectory anchors oil prices in the short term, and the cost of bringing on the marginal barrel of US tight oil supply serves as the medium-term anchor for prices – The oil inventory trajectory anchors oil prices in the short term, and the cost of bringing on the marginal barrel of US tight oil supply serves as the medium-term anchor for prices – Crude Oil prices

Morgan Stanley Crude Oil $90 2020 Morgan Stanley Crude Oil $90 2020   Morgan Stanley Crude Oil $90 2020   Morgan Stanley Crude Oil $90 2020   Morgan Stanley Crude Oil $90 2020   Morgan Stanley Crude Oil $90 2020   Morgan Stanley Crude Oil $90 2020   Morgan Stanley Crude Oil $90 2020   Morgan Stanley Crude Oil $90 2020  

Please follow and like us:
Social media & sharing icons powered by UltimatelySocial