Morgan Stanley(US:MS) Hua Er Jie Jian Wen·2025-11-03 08:24Core Viewpoint - OPEC+ has announced a pause in production growth, which has led Morgan Stanley to adjust its oil price forecast based on the strong signal sent by OPEC+, rather than actual production changes [1][2]. Group 1: OPEC+ Announcement and Market Impact - On November 2, OPEC+ announced plans to pause production growth in Q1 2026, marking the first such pause since resuming supply in April of the previous year [1]. - Morgan Stanley raised its Brent crude oil price forecast for the first half of 2026 from $57.50 to $60 per barrel, citing that OPEC+'s involvement will reduce market volatility [1][2]. - The organization is seen as returning to active market management, which provides downside protection for oil prices and reduces the risk of market collapse during anticipated supply surpluses [1][3]. Group 2: Factors Supporting Oil Price - In addition to OPEC+'s pause, new sanctions imposed by the U.S. and EU on Russian oil assets are expected to support Brent crude prices [4]. - Morgan Stanley believes that the combination of OPEC+'s proactive intervention and the demand shift due to sanctions is the core logic behind the upward revision of the oil price forecast [4]. Group 3: Supply and Demand Dynamics - Morgan Stanley predicts that the global oil market will experience significant oversupply in the first half of 2026, but OPEC+'s intervention will help mitigate the downward pressure on prices [3][4]. - The firm anticipates that by the second half of 2027, the market will gradually return to balance, with Brent crude prices potentially rising to $65 per barrel [4]. Group 4: Discrepancies in Production Data - There is a significant gap between OPEC+'s production quotas and actual production levels, with discrepancies exceeding 2.5 million barrels per day [5][8]. - Morgan Stanley's analysis suggests that OPEC+'s production increase plans are largely nominal, with actual production growth being minimal despite quota increases [9]. - The firm posits that the actual production levels may have already reached the levels prior to the 1.65 million barrels per day cut announced in April 2023, indicating limited growth potential for OPEC+ in the future [9].