On Monday, Morgan Stanley again cut its Brent crude oil price forecast for the coming quarters, the bank's second downward move in a month.

In the latest report, analysts at Morgan Stanley expect Brent crude to reach $75 per barrel by the fourth quarter of this year. And just two weeks ago, Morgan Stanley said it was lowering its fourth-quarter oil price to $80/bbl from $85/bbl.

Morgan Stanley said rising fuel inventories, declining refining margins and the spread between current and future prices have led to “similarities between recent oil price action and other periods of significantly weaker demand.”

Analysts, including Martijn Rats, see increasing headwinds on the demand side as the main reason for their lower fourth-quarter oil price forecasts.

Morgan Stanley lowered its 2024 global oil demand growth forecast to 1.1 million barrels per day (bpd), slightly lower than its previous forecast of 1.2 million bpd. The revision was driven by a number of factors, including slower growth in production from major non-OPEC countries such as the U.S. and Brazil, as well as demand for petrochemical feedstocks.

Analysts believe that the time spread on the oil futures curve signals an imminent “recessionary inventory build”, although it is too early to take this as the central bank's base forecast.

Seasonally strong demand usually wanes after the summer, and supply from oil-producing countries could accelerate in the fourth quarter of this year and again in 2025, leading to a shift in the supply-demand balance, the bank said.

Morgan Stanley currently expects the oil market to remain tight in the third quarter of this year, approaching a supply-demand balance in the fourth quarter and a surplus of about 1 million b/d in 2025. The bank expects the price of Brent crude to remain at the level of $70 per barrel through the fourth quarter of 2025.

However, the analysts also added that OPEC+ would be willing to balance the market, as evidenced by its decision to postpone its production cut program. Last week, OPEC+ reached an agreement to postpone production cuts that were scheduled to begin in October, and the organization now plans to ease production cuts starting in December.

In addition to Morgan Stanley, other Wall Street investment banks have recently lowered their oil price forecasts.

Last month, Goldman Sachs cut its expected range for Brent crude oil prices by $5 to $70 to $85 a barrel. The reasons Goldman gave for the downgrade included weakening Chinese oil demand, high global inventories and rising U.S. shale oil production.

Citi, on the other hand, expects oil prices to reach $60 a barrel next year if OPEC+ fails to implement further production cuts amid slowing demand and strong supply from non-OPEC producers.

Recently, crude oil prices have been under pressure due to weak demand and sufficient supply. Currently, Brent crude oil is hovering around $71, almost wiping out all of this year's gains and hitting a low point for the year.