Oil strategist says the market could be caught off guard by a crude spike this summer

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Investors could be caught off guard by the strength of an oil price rally this summer, according to Morgan Stanley's Martijn Rats.

Investors could be caught off guard by the strength of an oil price rally this summer, according to Morgan Stanley's Martijn Rats."Look, we're not calling for the super cycle, but we could have a bit of strength in the summer," Rats told CNBC's "Squawk Box Europe."for May delivery traded at $83.23 a barrel at 12:20 p.m. London time, up $1.3 for the session, while U.S.

"There is a view in the market that the non-OPEC producers can meet all of the demand growth this year and therefore there isn't much incremental room for OPEC oil and that means you rely on continued OPEC cuts," Rats said. "On the supply side, we're seeing a slowdown in U.S. shale, we've seen a wobbly start in Brazil we've seen a wobbly start in Canada. We expected inventories to build but year-to-date they are kind of flat. If in the first quarter, inventories flat then they can draw possibly quite significantly during the summer period."

"Now, at the moment we are going through oil refinery maintenance so is always a bit of a soft part of the year but I think as the summer driving season unfolds, inventories draw … look, we're not calling for the super cycle, but we could have a bit of strength in the summer."

 

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