Fitch raises average oil price forecast for 2021, 2022

Fitch has raised its forecast for oil prices in 2021 to $63 per barrel from $58 per barrel for Brent, Report informs.

The forecast price for WTI oil was increased to $60 per barrel from $55 per barrel.

The forecast for the price of Brent crude in 2022 has also been improved to $55 per barrel from $53 per barrel. The estimates for WTI oil price have been improved to $52 per barrel from $50 per barrel in the same period. In 2023-2024, as well as in the long term, Brent crude oil, according to the rating agency, will cost $53 per barrel, and WTI crude oil - $50 per barrel.

“Fitch Ratings has increased its 2021 and 2022 oil price assumptions for the Brent and West Texas Intermediate (WTI) benchmarks due to stronger year-to-date prices, a deficit in the market caused by a recovery in demand, and constrained supply from OPEC+ countries and heightened US capital discipline,” Fitch said.

Oil demand has been improving this year and is likely to continue to grow in 2H21 if vaccination rollouts are successful and pandemic-related restrictions are eased. New breakouts, particularly of new Covid-19 variants, remain the main risk for the sustained recovery in demand. Output policies of OPEC+ countries are key to managing oil supply.

OPEC+’s planned production increases originally agreed in April and confirmed in June will help meet growing demand but will be insufficient to balance the market in the second half of 2021.