Morgan Stanley raised its estimates for the growth of global oil demand this year by about 36%, based on the increasing momentum as a result of China’s lifting of restrictions related to the Covid-19 pandemic and the recovery of the aviation sector, but indicated that an increase in supply from Russia would offset that momentum.
The bank said that global oil consumption is expected to rise by about 1.9 million barrels per day, compared to its previous forecast of 1.4 million barrels per day.
“Indicators of transportation in China, such as congestion, are rising steadily,” the bank said, while “flight schedules have boosted demand expectations for jet fuel,” according to Reuters.
Analysts at the bank wrote that supplies from Russia were larger than expected, resulting in a deficit slightly smaller than assumed in the second half of the year. Consequently, analysts reduced their expectations for the price of Brent crude in that period to between $90 and $100 a barrel, from between $100 and $110 in the past.