According to Fitch Ratings, hydrocarbons are poised to dominate the market in the coming year. The agency has revised its global oil and European gas exchange price forecasts upward.
The surge in oil prices is a natural progression, as it always enjoys high demand. The anticipation now builds until 2024 to validate these projections.
Fitch Ratings attributes the improved 2024 oil forecasts to OPEC+ current measures in tightly managing the global black gold supply. The agency has also increased its price predictions for the TTF index from 2024 to 2026, anticipating sustained high prices in the European gas market over the medium term.
In Europe, the exchange price for natural gas in 2023 is now expected to be $12 per 1,000 cubic feet, up from the previous estimate of $10. Notably, the outlook for 2024 and 2025 remain steady at $13 and $10, respectively. The 2026 gas forecast has experienced a substantial increase to $8, surpassing the previous expectation of no more than $5.
It is crucial to highlight that these adjustments pertain exclusively to the European market. In contrast, the price forecasts for natural gas in the US remain unchanged. Fitch Ratings predicts the Henry Hub cost to be $2.8 per 1,000 cubic feet by the end of 2023, $3.25 in 2024, $3 in 2025, and $2.75 in 2026.
Regarding crude oil prices, Fitch Ratings experts are optimistic in their assessments as well. The outlook for Brent oil by the end of 2023 has been revised to $82 per barrel, up from $80, and for 2024 to $80, compared to the previous estimate of $75 per barrel. Predictions for 2025 and 2026 maintain stability at $70 and $65 per barrel, respectively.
For WTI oil, Fitch Ratings estimates the end of 2023 to see a cost of $78 per barrel, an increase from the earlier projection of $75 per barrel. In 2024, the forecast stands at $75 per barrel instead of the previous $70, while the expectations for 2025 and 2026 hold steady at $65 and $60 per barrel, respectively.
