Brent Drops Lower On Morgan Stanley Forecast

Brent crude oil began the week even further below $70 after Morgan Stanley trimmed its oil price forecast. The commodity traded at $68.11 at 7:00 GMT as the global supply glut grew and economic conditions continued to weigh.

Since OPEC decided not to cut production at its meeting in November, crude prices have been sliding downward with no sign of a growth catalyst in sight. Reuters reported that Morgan Stanley lowered its outlook down to $70 per barrel in 2015, a $28 decrease from its previous estimate. The investment bank also trimmed its 2016 forecast by $14 to $88 per barrel.

The updated forecast confirmed that the bank also sees the commodity as unable to recover on its own based on the current economic climate.

Both Asia and Europe have been struggling with stagnant growth recently, which has translated into falling demand in two of the top three oil consuming economies. While Europe struggles with a disconnected financial system and patchy growth among its member nations, China is working to meet its 7 percent  annual growth target, something investors have been skeptical about.

Data out on Monday showed that the nation’s imports were unexpectedly lower in November, down 6.7 percent. Exports also decreased, another indication that the nation could be in the midst of a slowdown. Crude imports increased any 9 percent to 6.18 million barrels per day,  but the increase was likely due to the nation beefing up its reserves rather than increased consumption.

Moving forward investors will remain focused on economic data for any signs of a pick up within the global economy. The US will be in focus this week as markets look for data that will prompt the Fed to raise interest rates early.