OPEC + plans to temporarily suspend production increases in Q1 next year, Morgan Stanley raises short-term oil price expectations.

After OPEC+ decided to pause production increases, Morgan Stanley raised its short-term oil price forecast. The bank said on Monday that it had raised its price forecast for Brent crude oil in the first half of 2026 to $60 per barrel, up from the previous $57.50. OPEC+ announced last Sunday its plan to pause production increases in the first quarter of next year. This is the first time the organization has paused production increases since resuming supply that was previously suspended in April this year. Analysts including Martijn Rats and Charlotte Figgins said in a report, "Although OPEC's announcement does not change our fundamental outlook on production prospects, it sends an important signal. With OPEC's participation, oil price volatility will decrease." Morgan Stanley also noted that there is a "significant gap" between OPEC's production quotas and actual production. The bank estimates that from March to October this year, OPEC+ only increased daily production by 500,000 barrels, far below the previously announced daily quota increase of 2.6 million barrels. On Monday, Brent crude oil prices rose to around $65 per barrel. Since the beginning of this year, oil prices have fallen by 13% due to signs of an emerging market oversupply concern. Morgan Stanley said that by the second half of 2027, the oversupply situation should ease, and oil prices are expected to recover to $65 per barrel.