Morgan Stanley raises its forecast for Brent crude prices by the end of the year and explains the reason.

The American investment bank Morgan Stanley raised its target forecasts for Brent crude oil prices for the fourth quarterly period of this year to reach $80 per barrel, having previously expected Brent to stabilize at around $75 per barrel.

In addition to this, Morgan Stanley pointed out the escalating geopolitical risks in the Middle East and their impact on the rise in crude oil prices. However, the American bank warned that weaker demand at a pace greater than expected, coupled with strong oil supply, could widen the surplus in the energy markets until next year.

Crude oil had recorded a strong rise at the beginning of this week, amid growing market concerns about the conflict between Israel and Iran and the possibility of a regional war in the Middle East.

However, negative developments in China quickly reinforced the recent drop in crude oil prices, after the country announced that downward pressures on the economy are diminishing, raising concerns about the future of Chinese demand for crude oil.