The crude oil market is currently tight but next year will likely be in surplus, with Brent prices declining into the mid-to-high $70s range, Morgan Stanley (MS) said.

The tightness will hold for most of the third quarter, the bank said in a note dated on Friday, but equilibrium will return by the fourth quarter, "when seasonal demand tailwinds abate and both OPEC and non-OPEC supply return to growth."

Three sources told Reuters last week that OPEC+ is unlikely to recommend changing the group's output policy at a mini-ministerial meeting next month, leaving in place a plan to start unwinding one layer of oil output cuts from October.

Morgan Stanley said it expects OPEC and non-OPEC supply to grow by about 2.5 million barrels per day (bpd) in 2025, well ahead of demand growth.

Refinery runs are set to reach a peak in August this year, and unlikely to return to that level until July 2025, it said.

Morgan Stanley left its forecast for Brent crude (BZ=F) prices for the third quarter of 2024 unchanged at $86 per barrel. Earlier this month, Goldman Sachs (GS) also maintained its projection for the quarter at an average Brent price of $86 a barrel.

Brent crude prices on Monday were up 0.54% at $83.08 a barrel by 0535 GMT, and US West Texas Intermediate crude (CL=F) futures were up 0.54% at $80.56. [O/R]

(Reporting by Daksh Grover and Ashitha Shivaprasad in Bengaluru; Editing by Tom Hogue)