Oil's rarest 'Smile' fascinates Morgan Stanley as glut weave

(Bloomberg) -The global oil market is currently in a very rare area, with term prices indicating almost-term density, while also flaging a ‘significant surplus’ according to Morgan Stanley. “The Brent Forward curve currently has an unusual shape: downward sloping over the first nine contracts and then upward sloping,” analysts, including Martijn Rats and Charlotte Firkins, said in a note. “It is so unusual that there is in fact little historical precedent,” they said. Rough is shocked this month by the fallout of the US guided trade war, OPEC movements to increase the offer against a faster than expected cut, and growing expectations for a surplus. Those drivers combined in April to encourage a sharp drop in head prices – with Brent 12% lower – but at the same time represent a more complicated underlying story about the timing of the glut. At the moment, Brent’s closer months are still more expensive than the next in order, a pattern known as decline, which is considered clumsy, as it shows that traders are willing to pay a premium for more fast barrels. But the curve turns to the opposite structure, known as Contango, further in 2026. “In about 30 years of historical data, there was no other period of time when the forward curve showed a ‘smile’ as it currently does. ‘ According to Morgan Stanley, who has retained his existing quarterly forecasts, global criteria Brent is expected to fall back into the low $ 60SA vat later this year. The futures for the leading leading month of June were the last time at $ 65.03 a barrel, while July was about $ 1 for July. “Trading rates will become a significant counter -wind for oil question,” the analysts said. “Our rough balance shows a deficit in the third quarter, but it then becomes a significant surplus.” (Update prices in the penultimate paragraph.) More stories like these are available on Bloomberg.com © 2025 Bloomberg LP first published: 29 Apr 2025, 11:22 am Ist