Newswire — Fitch Solutions Country Risk & Industry Research has left its Brent crude price forecast unchanged at $100 per barrel in 2022 and $90 per barrel in 2023, a new report from the company has revealed.
“Prices have stayed elevated in the wake of Russia’s invasion of Ukraine, reflecting supply disruptions stemming from the conflict itself, as well as Western sanctions in place on Russia,” Fitch Solutions stated in the report, which was sent to Rigzone.
“Supply elsewhere is also constrained forcing the U.S. to utilize its SPR in an unprecedented fashion. Other OPEC+ members are struggling to meet their monthly output quotas, while U.S. shale growth is decelerating,” Fitch Solutions added in the report.
“Despite this, downside risks to the price outlook have risen, as the demand outlook grows more clouded. The Ukraine conflict has weakened the economic prospects of major regional markets, including Russia and Germany, with our analysts making further downward revisions to their GDP growth forecasts this month,” Fitch Solutions continued.
The company also warned that Covid-19 infection rates “continue spiraling higher in China, triggering increasingly stringent containment measures that have undercut Chinese oil consumption and now threaten negative spillovers for other economies, particular in Asia”.
According to the latest information from the World Health Organization (WHO), weekly Covid-19 cases in China rose more than 111 percent from the week commencing on April 18 to the week commencing on April 25. Deaths also rose more than 93 percent during the same time frame, WHO figures showed. Both figures remain below peaks seen a few weeks ago, however, according to WHO data.
“We have opted not to alter our prices at this stage but note a shift in the balance of risk to the outlook, which now skews to the downside,” Fitch Solutions noted.
Looking further ahead, Fitch Solutions sees Brent crude prices averaging $85 per barrel in 2024 and $88 per barrel in both 2025 and 2026. The Bloomberg Consensus, which was also highlighted in the report and which Fitch Solutions is a contributor to, sees Brent prices averaging $98.6 per barrel in 2022, $85.3 per barrel in 2023, $80 per barrel in 2024, $78 per barrel in 2025, and $78.3 per barrel in 2026.
At the start of last month, Fitch Solutions revealed in a separate report that it had made a “large upward revision” to its Brent crude price forecast. In that report, the company outlined that it expected prices to average at $100 per barrel this year and $90 per barrel in 2023, which it highlighted was up from its previous forecasts of $82 per barrel for 2022 and $83 per barrel for 2023.
At the time of writing, the price of Brent crude oil stood at $110.33 per barrel. Brent has fluctuated recently, closing at $100.85 per barrel on March 1, $127.98 per barrel on March 8, $98.02 per barrel on March 16, $121.6 per barrel on March 23, $98.48 per barrel on April 11, $113.16 per barrel on April 18, and $104.97 per barrel on May 3.
To contact the author, email andreas.exarheas@rigzone.com
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