Morgan Stanley has raised its short-term crude oil price forecast following the OPEC+ decision to pause production increases.
The Wall Street investment bank said on Monday that it had increased its Brent crude price forecast for the first half of 2026 from $57.50 per barrel to $60 per barrel. The Organization of the Petroleum Exporting Countries (OPEC) and its allies announced on Sunday plans to halt production increases in the first quarter of next year — marking the first decision to pause production hikes since the coalition began restoring previously suspended supply in April this year.
Analysts, including Martijn Rats and Charlotte Firkins, stated in the report: “Although OPEC’s statement does not alter our fundamental view on production prospects, the signal it conveys remains significant. With OPEC’s involvement, volatility in oil prices will likely decrease.”
Morgan Stanley also pointed out that a notable gap is emerging between OPEC’s production quotas and actual output. The bank estimates that from March to October this year, OPEC+ actual daily production increased by only 500,000 barrels, far below the announced quota increase of 2.6 million barrels per day.
On Monday, Brent crude prices rose to trade near $65 per barrel. So far this year, prices have fallen by 13% amid signs that the feared supply surplus in the market has begun to materialize. Morgan Stanley stated that the oversupply situation is expected to balance out in the second half of 2027, at which point oil prices are anticipated to recover to around $65 per barrel.