Morgan Stanley sees a disconnect between the Brent crude physical market
and futures prices. Supply disruptions and a seasonal trough for refinery
maintenance have tightened the physical market, but macroeconomic concerns,
elevated speculative length, weak demand and concerns about supply growth are
weighing on the paper price.
Bank says such disconnects are rarely sustainable,
and either the physical market will loosen or prices must rise to reflect
reality. ICE September Brent is down 55 cents, or 0.5%, at $107.67/bbl. Nymex
September crude is down 18 cents, or 0.2%, at $105.79/bbl.