(Rigzone) Fitch Solutions Country Risk & Industry Research has released its latest oil price forecasts to 2025.
In a report sent to Rigzone on Monday, the company projected that Brent crude prices will average $70 per barrel in 2021, $67 per barrel in 2022, $68 per barrel in 2023, $70 per barrel in 2024 and $73 per barrel in 2025.
The Bloomberg Consensus, which was highlighted in the report and which Fitch Solutions is a contributor to, forecasts that Brent crude prices will average $69 per barrel this year, $66.5 per barrel next year, $66 per barrel in 2023, $70 per barrel in 2024 and $65.7 per barrel in 2025.
“This month, we are holding to our view for Brent prices to average $70 per barrel in 2021 and $67 per barrel in 2022,” Fitch Solutions analysts stated in the report.
“Bullish price signals hint to a rising risk that prices could climb higher, although our core view remains that prices will not break sustainably above $80 per barrel. Despite the strong outlook for prices in early 2022, we expect supply growth to far outpace demand growth next year pushing prices lower as the year goes on, as OPEC+ cuts roll off and non-OPEC output continues to tick higher,” the analysts added.
“The outlook for global GDP growth remains positive but momentum is slowing with 2021 forecast to grow by 5.7 percent and 2022 by 4.2 percent, adding to the view that global fuel demand growth will be weaker next year. Higher energy prices, supply chain bottlenecks, and less fiscal and monetary support could, on balance, even see global crude demand fall short of current expectations,” the Fitch Solutions analysts went on to say.
In its report, Fitch Solutions published several key risks to its outlook for both the upside and downside. For the upside, these included international travel restrictions being rapidly rolled back, boosting jet fuel demand, and Iran and the U.S. failing to reach agreement on the nuclear deal, extending sanctions beyond 2022-2023. For the downside, key risks included slow vaccine rollouts and the spread of new virus variants leading to continued outbreaks and rapid price gains incentivizing increased spending among U.S. shale producers, leading to a rebound in output.
Last month, the United States Energy Information Administration (EIA) kept its average Brent spot price forecasts flat month on month. The EIA’s latest monthly short term energy outlook (STEO) showed that the organization expects Brent spot average prices to hit $68.61 in 2021 and $66.04 in 2022. The organization’s next STEO is scheduled to be released on October 13.
At the time of writing, the price of Brent crude stood at $81.71 per barrel.