BAKU, Azerbaijan, June 25. Oil prices will continue to fluctuate driven by competing demand and supply factors, Trend reports via Fitch Solutions.
Fitch Solutions maintains its forecast for Brent crude to average $100 per barrel in 2022, and $90 per barrel in 2023, although the upside risks still remain.
“The demand-side lift from the post-pandemic recovery has largely been exhausted and consumption growth has been bought under rising pressure from spiraling energy prices and a broader cost of living crisis,” Fitch Solutions said.
As the report noted, post-COVID-19 recovery in China could help boost demand in the latter part of this year, as the government's mass testing scheme helps ease lockdown restrictions.
However, broader recession risks continue to exert pressure and are currently putting pressure on oil prices. Although, the factors influencing the supply remain optimistic. Despite large-scale emissions of barrels from strategic oil reserves, the market is tense, the report noted.
“US shale producers are proving reluctant to respond to higher prices with more rapid supply growth and OPEC+ continues to full far short of its monthly production quotas. And, as Europe accelerates its efforts to drive the purchases of Russian oil down towards zero, Russia production will come under greater downside pressure,” Fitch Solutions added.
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