Fitch Solutions Makes Substantial Gasoline Price Forecast Revision

Fitch Solutions Country Risk & Industry Research has revealed that it has made a “substantial” upward revision to its gasoline price forecast this quarter.

In a report sent to Rigzone recently, the company outlined that it now expects the RBOB gasoline price to average $2.95 per gallon in 2022, which it highlighted marks a revision from its $2.18 per gallon forecast set in February this year.

Looking further ahead, the company projects that the price of NYMEX RBOB gasoline futures will hit $2.60 per gallon in 2023, $2.25 per gallon in 2024, and $2.05 per gallon in both 2025 and 2026. The Bloomberg Consensus, which was also highlighted in Fitch Solutions Country Risk & Industry Research’s latest report, forecasts that the price of NYMEX RBOB gasoline futures will hit $3.26 per gallon in 2022, $3.28 per gallon in 2023, $3.01 per gallon in 2024, and $3.56 per gallon in 2025. No Bloomberg Consensus for 2026 was shown in the report.

“The gasoline price benchmark is set to remain elevated over Q2-Q322 with the average price for the remainder of the year expected to settle at $2.98 gallon, above the 2022 year to date average of $2.83 per gallon,” analysts at Fitch Solutions Country Risk & Industry Research stated in the report. 

“The growing risk of oil export disruptions driven by Russia’s invasion of Ukraine underpins bullish oil prices, which are set to dictate gasoline price levels in 2022. The gasoline market is set to tighten over the near term on expected growth in demand further strengthened by the seasonal effect,” the analysts added in the report.

“However, we point at certain downside risks to gasoline demand, which could weaken the price growth momentum, namely the zero-Covid policy in China and accelerating demand destruction due to high retail gasoline prices,” the analysts continued.

The oil and gas team at Fitch Solutions has previously highlighted to Rigzone that the relationship between RBOB and retail prices is useful for directional trends as well as volatility.

As of April 18, the average price of regular gasoline in the U.S. stood at $4.08 per gallon, according to the AAA gas prices website. The year ago average stood at $2.87 per gallon, the site outlined.

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