Brent Oil Price to Grow by $14

The average price of Brent crude oil will increase by $14 per barrel from 2020 to 2024, according to Fitch Solutions Country Risk & Industry Research’s latest oil price report.

Fitch Solutions expects Brent to average $44 per barrel this year, before growing to average $51 per barrel in 2021, $53 per barrel in 2022, $55 per barrel in 2023 and $58 per barrel in 2024.

The Bloomberg Consensus, which was also highlighted in Fitch Solutions’ latest report, forecasts that Brent will average $42.4 per barrel in 2020, $50 per barrel in 2021, $53 per barrel in 2022, $55 per barrel in 2023 and $60.4 per barrel in 2024.

“Our view remains that the market will continue to rebalance over H220 and into 2021, driving a continued drawdown of global inventories and further gains in prices,” Fitch Solutions analysts stated in the report, which was sent to Rigzone on Wednesday.

“However, the pace of the rebalancing will slow, reflecting a more gradual recovery on the demand side, and a return of shut-in wells and the unwinding of the OPEC+ deal on the supply side,” the analysts added in the report.

“Moreover, the contango term structure in Brent has gradually deepened this month, typically an indication of market loosening and a bearish sign of sentiment and prices. Financial markets more broadly have begun to look toppy and the risks of a partial relapse in prices are elevated in the near term,” the analysts continued.

At the time of writing, the price of Brent oil stood at $43.81 per barrel. Brent plummeted earlier this year amid the Covid-19 pandemic and an OPEC+ disagreement but has risen steadily since April.

As of September 2, 3:56pm CET, there have been 25.6 million confirmed cases of Covid-19 globally, with 852,758 deaths, according to the latest data from the World Health Organization.

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