Fitch Cuts Outlook For WTI Crude, Maintains Brent Forecast

Fitch Solutions kept its 2023 Brent crude price assumptions unchanged at $85/bbl, but cut its outlook for US WTI crude oil slightly to $80/bbl, from the $81/bbl previously expected.

• In comparison, JP Morgan forecasts Brent to average $90/bbl, and Barclays places its average Brent forecast at $92/bbl.
• For 2024, Fitch revised up its forecast for the price of Brent and US WTI crude to $75/bbl and $70/bbl, respectively.
• “Our increased 2024-2025 oil price assumptions reflect our view that it will take longer for prices to moderate due to tightening supply from Russia and OPEC+’s cautious approach to supply increases,” the agency wrote.
• Fitch expected the market to adjust gradually, thanks to the growth of non-OPEC oil output, especially in the US. This is coupled with the prospect of capacity increases in OPEC nations, particularly in Saudi Arabia and the UAE, it added.
• “The market is currently broadly balanced, despite China’s gradual reopening, which could potentially increase demand while oil exports from Russia have been re-routed so far, rather than materially reduced. Our long-term assumptions reflect falling long-term demand due to the energy transition,” Fitch said.