Morgan Stanley raises oil price forecast due to OPEC+ pause in production increase

Investment bank Morgan Stanley, one of the largest on Wall Street, has improved its short-term forecast for oil prices after OPEC+ countries decided to suspend the increase in production. On November 3, the bank announced that it was raising its forecast for benchmark Brent crude from $57.5 to $60 per barrel for the first half of 2026, Bloomberg reports.

"Even if OPEC's announcement does not change the mechanics of our production forecast, it sends an important signal. When OPEC is involved, volatility is reduced," the agency quotes a note by Morgan Stanley analysts Martin Raths and Charlotte Firkins.

They noted that there is a "significant gap" between the established quotas and the actual level of OPEC production. According to the bank's assessment, from March to October 2025, the oil cartel member countries increased production by only 500 thousand barrels per day, while the declared increase in the quota by 2.6 million bpd.

UBS analysts, for their part, still expect the Brent price to remain in the $60-70 per barrel range, with a target for the end of 2025 of $62 per barrel, Seeking Alpha reported. "By mid-2026, market focus is likely to shift to 2027, in which we expect moderate non-OPEC+ supply growth and continued demand growth," UBS forecasts.

On November 2, OPEC+ countries agreed to increase oil production quotas in December by 137 thousand barrels per day compared to the November level, and in the first quarter of 2026 to take a pause in the increase - "due to seasonality". This is the first such step since the cartel began returning undersupplied volumes to the market in April 2025, according to Bloomberg.

Over the past three months - on the back of quota increases - Brent crude oil has fallen in price by about 10%, but prices rebounded from a five-month low after US sanctions were imposed on major Russian oil producers, the agency recalls .

On November 3, oil prices initially rose after the OPEC+ decision, but then went into negative territory: Brent futures slipped by 0.3% to $64.6 per barrel, contracts for the North American grade WTI fell by 0.4% to $60.7. The pressure on quotations came from weak production data from Asia - the largest consumer of oil, explains Reuters.

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