Fitch raises oil price forecast for 2021

According to a report from the Rig Zone on May 7, the latest oil price outlook report from Fitch Solutions Country Risk & Industry Research shows that the company’s analysts have raised their 2021 deployment.

Analysts currently predict that the average price of Brent crude oil this year will be US$66 per barrel, which is higher than the US$64 per barrel predicted in the company’s last oil price report released in March.

Analysts said in a May report sent to the Rig Zone on Thursday that the forecast means that the average for the rest of the year will be around US$68 per barrel, which is basically the same as the spot price.

Analysts added in the report that strong economic data from China and the United States and rising vaccination rates make people feel optimistic.

Fitch analysts pointed out in a May report that if oil prices continue to exceed $70 a barrel, it may trigger the company's forecast upward.

Analysts said in the report that there have been some signs of deteriorating market conditions recently, including the narrowing of the Brent crude oil spot premium and the weaker performance of spot contracts than financial settlement contracts.

Looking ahead, Fitch analysts predicted in their May report that the average Brent crude oil price in 2022 will be $64/barrel, in 2023 it will be $65/barrel, in 2024 it will be $70/barrel, and in 2025 it will be 72.

Hao Fen translated from the rig zone

The original text is as follows:

　　Analysts Raise 2021 Oil Price Forecast

　　Analysts at Fitch Solutions Country Risk & Industry Research have raised their average Brent oil price forecast for 2021, the company's latest oil price outlook report has revealed.

　　The analysts now see Brent averaging $66 per barrel this year, up from the forecast of $64 per barrel made in the group's previous oil price report, which was released back in March.

　　“The forecast implies a rest of year average of around $68 per barrel, broadly flat from spot,” the analysts stated in the May report, which was sent to Rigzone on Thursday.

　　“Strong economic data out of China and the US and rising vaccination rates give cause for optimism.

　　“In our view, a combination of easing supply constraints and lingering demand-side uncertainties will weigh heavily on further price growth this year,” the analysts continued.

　　Fitch Solutions analysts noted in the May report that a sustained break above the $70 per barrel level would likely trigger an upgrade to the company's forecast.

　　"There have been some signs of deterioration in the health of the market of late, including narrowing backwardation in Brent and underperformance of physically versus financially-settled contracts," the analysts said in the report.

　　"Speculative positioning has turned slightly more bullish over April, but the ratio of longs to shorts remains far below its Q1 highs.

　　"In our view, the market is likely underestimating the risks related to future outbreaks of the coronavirus, the rise of new, more transmissible variants and the pace of the global vaccine roll out.

　　Looking further ahead, Fitch Solutions analysts forecasted in the May report that Brent will average $64 per barrel in 2022, $65 per barrel in 2023, $70 per barrel in 2024, and $72 per barrel in 2025.
The Bloomberg Consensus sees Brent averaging $64 per barrel this year, $64.
5 per barrel in 2022, $65.
3 per barrel in 2023, $65 per barrel in 2024, and $66 per barrel in 2025.