Morgan Stanley revises oil outlook over Omicron

Morgan Stanley has adjusted its oil outlook from $95 per barrel to $82.50 as the new variant of covid-19, Omicron, as well as surging cases in parts of Europe, dashes the recovery of the oil and gas sector.

This is coming as the Organisation of Oil Producing Countries (OPEC) heads to a meeting this week with an expectation of adding about 400, 000 barrels per day of crude to the market.

Oil prices crashed last week to about $69 per barrel after a speedy rise to almost $90. At the time this report was compiled, Brent was trading for $74.67, it was $83 on Tuesday last week and $85 about a month ago.

Nigeria’s sweet crude was the worst hit, standing at $72 after rising to about $85 earlier in the month, although the price is still on track with projections in the 2022 budget.

While Nigeria’s crude oil production had dipped to 1.2 million bpd before slightly rebalancing, experts noted that the OPEC+ meeting this week may not see the monthly addition of 400, 000 bpd due to capacity challenges.

Morgan Stanley stated that the OPEC+ meeting this week might pause the monthly 400,000-bpd increase in production, stressing that the alliance has neither the capacity to do so, nor a reason to exacerbate an oversupply.