Morgan Stanley advised not to expect a sharp rise in oil prices


The sharp increase in oil prices impedes the economic slowdown and the high level of production, according to a note by American Bank Morgan Stanley. “Oil prices are now, apparently, reached a minimum, but in the course of this year is likely to remain low and will start to rise in 2017”, — quotes the document Reuters.

The Bank noted that cheap oil stimulated economic growth that many had hoped. “When oil prices fall below the cost of production, increased profits from its consumers is less than the costs of producers, and the decline in oil prices becomes a game with a negative amount”, — stated in the document.

The Bank added that prices will be difficult to overcome the level of $45 per barrel, even if the dollar continues to decrease. Morgan Stanley also said that “no longer expect an acceleration of GDP growth in 2016”, and estimates the risk of a global recession at 30%.

On Friday, the International energy Agency (IEA) said that oil prices reached the lowest level due to lower production in the U.S. and other producers. Reuters reminds that the fall in the number of rigs in the U.S. has continued for 12 consecutive weeks, and last week their number has decreased to 386, which is the lowest level since December 2009.

At the same time banks Goldman Sachs and Barclays warn that the price will fall due to excess supply B1 million barrels. a day, the Agency says. According to him, the note from Barclays on Monday, 14 March, says that to balance the market requires price below $40 bbl. lasted at least two quarters.

Reuters notes that demand in key Asian markets remains stable. In particular, the capacity of Chinese refineries in January-February rose by 4.6% year on year to 10,59 million barrels./day, the Agency refers to official data published on Saturday. The demand for fuel in India increased in February by 11.7%, adds Reuters.

May futures on the mark Brent at 12:55 fell on the London exchange ICE by 1.41% to $39,80 MB/day after Saudi Arabia announced that its production in February was close to the record level 10,22 MB/day. According to the IEA, which leads RIA Novosti, Saudi Arabia in February was mined 10.23 million Barr./day, slightly above the January level in 10,21 million barrels./day.