Morgan Stanley Releases Four Oil Price Scenarios: Fed Interest Policy May Shift

Uncertainty surrounding the Fed's interest‑rate decision could pull the banking sector into mild volatility in the short term. Technical indicators show the price near the 20‑ and 50‑day moving averages, the RSI at a moderate level, and the MACD above its signal line. These signals support the likelihood of the current trend continuing. Consequently, MS’s price may remain stable in the short term without a major directional shift.

Morgan Stanley’s four scenarios emphasize the likelihood of a change in the Fed’s interest‑rate policy, which could introduce uncertainty into the markets. Brent crude is showing a modest uptick at the $107 level, yet the MACD remains below its signal line, suggesting short‑term resistance. While the SMA20 sits above the SMA50, supporting a medium‑term uptrend, the 24‑hour rise of 0.27% is quite limited. Potential Fed rate cuts could boost demand and lift prices, but current technical indicators have not yet fully confirmed such a move. In the near term, prices are likely to oscillate within the $106–$108 range, with no major directional reversal anticipated.

Morgan Stanley’s four scenarios indicate that the Federal Reserve’s interest‑rate policy could change, creating uncertainty in the markets. Current technical indicators show downside pressure in the short term, as the price trades below the 20‑day moving average while the MACD remains above its signal line. The RSI sits at 52, outside over‑bought or over‑sold territory, which complicates the determination of a clear trend. If the Fed were to cut rates, demand could rise, but present indicators do not support that possibility. Consequently, a modest decline in prices over the next one to three days is likely, though a significant move is not expected.

Morgan Stanley’s four crude oil scenarios incorporate the possibility of a change in the Federal Reserve’s interest‑rate policy. If the Fed cuts rates, oil demand could rise, potentially supporting Exxon Mobil’s (XOM) price. Technical indicators also signal a bullish trend: the price sits above both the 20‑ and 50‑period simple moving averages, the MACD is above its signal line, and the RSI hovers around 60—well below over‑bought territory. A modest upside is expected over the next one to three days, but volatility may increase once the Fed’s decision becomes clearer. Accordingly, positions should be managed cautiously and risk controls maintained.