Fitch Solutions Raises Oil Price Forecasts

Fitch Solutions Country Risk & Industry Research has increased its Brent oil price forecasts to 2024, the company’s latest oil price outlook has revealed.

According to the latest outlook, which was sent to Rigzone recently, Fitch Solutions now sees Brent averaging $42.7 per barrel in 2020, $53 per barrel in 2021, $51 per barrel in 2022, $55 per barrel in 2023 and $60 per barrel in 2024. The company’s previous oil price outlook forecasted that Brent would average $42.5 per barrel this year, $48 per barrel next year, $50 per barrel in 2022, $54 per barrel in 2023 and $58 per barrel in 2024.

The Bloomberg Consensus, which Fitch Solutions is a contributor to and which was highlighted in the company’s latest outlook, forecasts that Brent will average $42.2 per barrel in 2020, $47.8 per barrel in 2021, $53.5 per barrel in 2022, $54 per barrel in 2023 and $60.8 per barrel in 2024.

“This month we have revised our price forecast higher for 2021, with global growth rebounding on vaccine uptake and Covid-19 headwinds easing through the year, supporting an upward revision of our price expectation for the year to $53 per barrel from $48 per barrel forecast previously,” analysts at Fitch Solutions stated in the company’s latest oil price outlook.

“We estimate that 2020 average oil price to be $42.7 per barrel based on the sharp uptick in prices seen in November on U.S. election results and buoyant results for multiple vaccine trials,” the analysts added.

“The supply side fundamentals over the next few years are broadly bearish and the concentration of returning barrels in 2022 will see average prices in that year come in lower at $51 per barrel, than that forecast for 2021,” the analysts went on to state.

In the outlook, the analysts noted that the OPEC+ meetings will likely see the group agree to rollover the current level of output cuts for at least three additional months, “providing support to prices over Q1 2021”. They also outlined that the global Covid-19 pandemic has accelerated energy transition initiatives among global markets and said it will likely entail pre-emptive policy rollouts and adjustments in demand patterns away from fossil fuels over the coming years.

At the time of writing, the price of Brent crude oil was hovering around $48 per barrel. As of December 2, there have been 63.3 million cases of Covid-19 globally, with 1.4 million deaths, according to the latest figures from the World Health Organization.

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