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Morgan Stanley analysts on Wednesday raised their forecast for global oil demand growth for this year to 1.9 million bbl/day from their previous forecast of 1.4 million bbl/day, citing increasing momentum in oil. China reopening but signaling increased supply from Russia. as a compensating factor.
“Mobility indicators for China, such as congestion, have been rising steadily,” while “flight schedules have reaffirmed the outlook for jet fuel demand,” Morgan Stanley said.
However, supply from Russia has been stronger than expected, leading to a slightly smaller-than-expected deficit in the second half of the year, analysts said, cutting their second-half Brent oil price forecast. to $90-$100/bbl from $100-$110/bbl previously.
Earlier this month, Goldman Sachs cut its 2023 Brent price forecast and raised its global supply forecasts for 2023 and 2024, while saying stronger Chinese demand should send oil markets back into deficit in June.
US crude oil on Wednesday extended its longest losing streak so far this year to six sessions, after Federal Reserve minutes showed officials backed further rate hikes, which was added to concerns about a possible lower demand for oil.
Previous month Nymex crude (CL1:COM) for April delivery settled -3.1% at $73.95/bbl, and April Brent crude (CO1:COM) closed -2.9% to $80.60/bbl as both benchmarks posted their lowest sell-offs since February 3.
Meanwhile, US natural gas futures rallied after dipping below $2/MMBtu for the first time since September 2020, helped by colder-than-expected weather forecasts and as investors covered positions. short after several weeks of falls.
Prior Month Nymex Natural Gas (NG1:COM) for March Delivery Closed +4.8% at $2,174/MMBtu, breaking a losing streak of four sessions.
ETFs: (NYSEARCA:USE), (BNO), (UCO), (SCO), (BOD), (DRIP), (GUSH), (USOI), (NRGU), (NYSEARCA:UNG), (UGAZF), (BOIL), (KOLD), (UNL), (FCG)
“Natural gas is now oversold and probably bottoming out,” Harrison Schwartz writes in a recently published analysis in Seeking Alpha.