Rarest oil price trends signal future demand surplus — Morgan Stanley

Morgan Stanley reports that the global oil market is currently experiencing a unique scenario. While fuel prices indicate a short-term supply shortage, they also point to a significant demand surplus in the long run.

The bank's analysts, Martijn Rats and Charlotte Firkins, describe the Brent crude forward curve as highly unusual, with a downward slope for the first nine contracts through February 2026, followed by an upward slope from March 2026 till the end of 2030. They claim such patterns are extremely rare, even with the last 30 years of historical data.

In April 2025, Brent crude dropped by 14.7% due to the US trade war and increased oil production from OPEC+ countries. The fuel is now trading at $64.50 per barrel. Quarterly forecasts from Morgan Stanley expect oil to fall to $60 per barrel later this year.

Global tariffs are likely to be a significant drag on fuel market demand. In the third fiscal quarter, the US crude oil supply/demand balance showed a deficit, but this is supposed to turn into a substantial surplus in the near future.