Fitch Ratings on Tuesday revised up its 2022 and 2023 oil price predictions due to trade flows disruptions and redirection as well as higher post-pandemic demand.
The rating agency increased its 2022 price forecast to $105 a barrel from $100 a barrel for Brent and raised WTI oil prices to $95 a barrel from $100 a barrel.
The agency forecast that Brent price would average $85 a barrel in 2023, up from $80 a barrel in its previous estimate, while the forecast price of West Texas Intermediate (WTI) increased from $76 a barrel to $81 a barrel.
Fitch attributed the increased oil price assumptions for both Brent and WTI benchmarks to disruptions of established supply channels and growing oil demand.
The EU has banned seaborn imports from Russia, so it will have to replace about a third of all oil imports with supplies from other regions, while larger volumes of Russian oil will go to India and China, Fitch said.
“However, the use of spare capacity and trade flows redirection will eventually reduce the pressure on global oil supply, so we expect the prices to moderate. Our long-term oil price assumptions are unchanged,” it added.
By Sibel Morrow