Morgan Stanley expects Brent to climb to $90/bbl by summer 2024

The also hiked its first-quarter Brent price outlook to $85 per barrel from $82.5, second-quarter forecast to $87.5 from $82.5 and for the fourth quarter it sees prices at $85 versus $80 previously.

Oil Brent hovered just under the $86 a barrel mark on Monday. Prices have been supported as Ukraine has stepped up attacks on Russian oil infrastructure since the start of the year, hitting numerous large oil refineries in an attempt to cripple Russia's military.

"These attacks probably mean that some oil production may still need to be reduced. As a result of this, combined with the OPEC+ commitment, we have reduced our oil production forecast for Russia for 2Q and 3Q by ~0.2 million bpd as well."

Morgan Stanley is also of the view that instead of a geopolitical risk premium, there is actually still a small discount in the Brent price for the risk that OPEC cohesion deteriorates.

"Every month that OPEC discipline remains in-place, Brent flat price likely continue to catch up with where inventories and time spreads already are."

OPEC+ members led by Saudi Arabia and Russia earlier this month agreed to extend voluntary oil output cuts of 2.2 million bpd into the second quarter.

Morgan Stanley still expects oil demand to grow at 1.5 million bpd this year, slightly above historical trend growth, driven by jet fuel and petchem, and regionally by China and India.