Fitch Ratings Provided Updates on Oil and Gas Price Assumptions

SEATTLE (Oil Monster): Fitch Ratings has provided updates on oil and gas price assumptions. It maintained most of the earlier assumptions, mainly on account of no major change in market fundamentals over the period.

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The base-case oil price assumptions remained unchanged. The Brent crude oil prices, which hit levels of $90 per barrel following increased tensions in the Middle East region in April, witnessed decline over abatement of such concerns. The OPEC decision to phase out additional output cuts by September next year led to sharp decline in prices. The output cuts, along with record U.S. production and surge in global oil inventory levels are feared to result in a surplus oil market in 2025.

Fitch Ratings expects global oil consumption growth to continue in 2024-’25. The global production growth will be less than 1MMbpd in 2024, whereas the growth will accelerate to well above 1MMpbd in 2025, primarily driven by increased production from non-OPEC+ countries, especially from the U.S., Canada and Brazil.

However, the latest forecasts published by the International Energy Agency (IEA) suggests that global oil demand will witness a decline in 2024, partly driven by slower growth in China. The consumption is expected to remain at more or less the same levels in 2025 as well, they said.