Analyst Releases Latest Multi-Year Oil Price Forecast

Fitch Solutions Country Risk & Industry Research has released its latest multi-year oil price forecast, which stretches to 2026.

According to its latest projections, the company now sees the average price of Brent hitting $72 per barrel this year, $73 per barrel in 2023, $75 per barrel in 2024, and $78 per barrel in both 2025 and 2026.

The forecast is roughly in line with the Bloomberg Consensus, which was included in Fitch Solutions Country Risk & Industry Research’s latest oil price outlook report and which the company is a contributor to, up to 2024. The Bloomberg Consensus highlighted in the report projects that the average price of Brent will come in at $73 per barrel in 2022, $73.4 per barrel in 2023, $74.7 per barrel in 2024, and $69.9 per barrel in 2025. A forecast for 2026 is not included.

“This month we again hold our Brent price forecast for 2022 steady at $72 per barrel with our narrative for oversupply to build throughout the year remaining intact,” analysts at Fitch Solutions Country Risk & Industry Research stated in the report, which was sent to Rigzone earlier this week.

“However, the outlook remains subject to multiple risks on both the supply and demand-side fronts. While the Omicron variant is fueling new all-time high infection rates across the globe, so far hospitalization rates remain manageable and severe illness is appearing less likely than with earlier variants,” the analysts added in the report.

“However, the national responses to the new outbreaks have been mixed, with many implementing soft lockdowns and travel restrictions, largely impacting aviation demand,” the analysts continued.

Fitch Solutions Country Risk & Industry Research analysts noted in the report that supply also remains uncertain, with a potential shift in OPEC+ tapering policy a risk given the uncertainty in demand.

“Unplanned supply outages remain a possibility, with production in Libya severely impacted from political infighting and emergency repairs to a key export pipeline,” the analysts stated.

In the week commencing December 27, 2021, global confirmed Covid-19 cases hit an all time high of 9.74 million, data from the World Health Organization (WHO) shows. The previous weekly high was set in the week commencing April 26, 2021, at 5.69 million cases, according to WHO figures. Deaths for the week commencing December 27, 2021, were shown by WHO to stand at 42,075. Deaths for the week commencing April 26, 2021, were shown to stand at 95,580.

At the time of writing, the price of Brent crude oil stood at $82.72 per barrel.

To contact the author, email andreas.exarheas@rigzone.com