2024-01-08T15:58:05+00:00
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/ Today, Monday, Fitch Credit Rating Agency raised its forecast for the price of Brent crude to $80 per barrel in 2024 from $75 in its previous forecast, reflecting what it described as the continued firm control of the OPEC+ group over supplies, while it expected it to fall to $65 in 2026.
According to Fitch estimates in a report seen by the Arab World News Agency (AWP), the price of Brent crude next year, according to a basic scenario, is expected to reach $70 per barrel, without change from previous expectations, and to decline to $65 in 2026.
Regarding US West Texas Intermediate crude, Fitch raised its price expectations to $75 per barrel in 2024 from $70 in the previous estimate, with it falling to $65 and $60 in 2025 and 2026, respectively.
Fitch said that raising its estimates for the price of the two global benchmarks this year is based on OPEC+’s ongoing efforts to support oil prices, including the recent decision taken by a number of the group’s members to join Saudi Arabia and Russia in implementing additional cuts in the first quarter of 2024.
The OPEC+ group includes the Organization of the Petroleum Exporting Countries (OPEC) and independent producers, including Russia.
Fitch added that the oil market is likely to record a deficit of about 1.2 million barrels per day in the second half of 2023, according to the International Energy Agency, noting that the additional cuts by OPEC+ indicate that the deficit may continue in the first half of this year, assuming compliance with production cuts remains. Strong.
The report stated that the International Energy Agency estimates the increase in demand in 2023 at 2.4 million barrels per day, 75% of which comes thanks to the recovery in Chinese demand after the Corona pandemic. But he added that demand growth will proceed at a modest pace of 0.9 million barrels per day in 2024, according to the agency, primarily due to a slowdown in India and China.
Fitch said it expects crude prices to approach its assumptions over time as the impact of OPEC+ policies declines, the premium resulting from geopolitical conditions recedes, and the rate of demand growth continues to slow.
Natural gas
Fitch also raised its estimates of gas prices on the Dutch gas contracts trading platform (TTF) to $12 and $8 per cubic meter in 2024 and 2026, respectively, compared to $10 and $5 in its previous estimates, while it kept its estimate for 2025 unchanged at $10 per cubic meter.
Fitch expected that gas prices will likely remain relatively high in the medium term, as global capacity to export liquefied natural gas will not witness significant increases before 2026 from new projects in Qatar and the United States.
She added that gas prices in Europe are likely to continue to be affected by external events in 2024 after witnessing fluctuations in 2023 due to seasonal factors and external shocks such as the war between Israel and the Palestinian Hamas movement, and the workers’ strike at liquefied gas stations in Australia.
She explained that the European infrastructure for importing liquefied gas is currently being expanded, as its gasification capacity has increased by 36.5 billion cubic meters since the start of the Russian war on Ukraine, and it is planned to add another 106 billion cubic meters by 2030, increasing the European capacity to return liquefied gas to its gaseous form to 406 billion. Cubic meters.
Fitch said that the demand for gas in Europe witnessed a continuous decline in 2023, falling in the first eight months of the year by 20% from the levels before the Russian invasion of Ukraine, adding that it believes that the prospects for an increase in demand are weak, as this requires increasing industrial demand or changing strategies aimed at reducing Natural gas consumption or petrochemical output growth, which is still weak and is likely to remain below historical levels during the first half of the current year at least.