Morgan Stanley Sees $100 Brent as Oil Markets Tighten

Morgan Stanley has raised its fourth-quarter Brent crude forecast to $100 a barrel due to shrinking inventories and prolonged Middle East supply disruptions. This tightens the global oil market, which could lead to higher energy prices affecting inflation and market outlook. The bank's call is based on disappearing supply buffers, with oil held at sea falling by roughly 168 million barrels since July 13.

Middle East exports have retreated toward March-April levels, and Morgan Stanley expects the region's supply recovery to extend well into 2027. This keeps the oil market in deficit through the fourth quarter of 2026 and first quarter of 2027. Independent data from the International Energy Agency (IEA) reinforce this tightening thesis.

The IEA estimates that global observed inventories plunged 69 million barrels in July and have fallen 410 million barrels since the Middle East conflict began. The agency also expects a roughly 1.8 million-barrel-per-day deficit during the third quarter, more than double its previous estimate.