According to data published on the website of Fitch Ratings on Monday, the international credit rating agency expects oil prices to be higher than before in 2024 and 2025 because the geopolitical problems have not eased.
However, the credit rating agency did not change its assumptions regarding this year’s price of North Sea Brent oil and the long-term oil price.
According to their justification, the market is currently roughly balanced despite the gradual reopening of China, which could potentially increase demand, while Russian oil exports – after a significant decline so far – could increase due to the diversions. In the long term, Fitch assumes a decrease in demand due to the energy transition.
Fitch’s forecast for this year includes a Brent oil price of $85 per barrel and a WTI oil price of $80, and for 2024 it predicts a Brent price level of $75 instead of the previously assumed $65 and a WTI price of $70 per barrel instead of the previous $62.
At the same time, Fitch Ratings reduced the European TTF gas price forecast for this year from the previous estimate of $40 per thousand cubic meters to $20, and the US Henry Hub’s gas price forecasts for this year and next year, from $5 to $3.5 per thousand cubic meters.
By comparison, the gas price on the TTF today hovers around 53 euros.
The move was justified by the weakening of European demand, abundant LNG stocks, higher-than-average gas levels in storage and the fact that, according to their expectations, production in the United States will increase.
Analysts at Fitch Ratings expect the European market to be balanced in 2023, although price volatility may persist due to the availability of LNG on global markets and further efforts to curb industrial and residential demand.
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