BAKU, Azerbaijan, Oct.25
By Leman Zeynalova – Trend:
Fitch Solutions has revised RBOB NYMEX gasoline price forecast for 2021 from USd205/gal to USd208/gal as the benchmark continues to push past multi-year highs on strong demand and refiner constraint, Trend reports with reference to the company.
“Prices have climbed higher in recent weeks on a surge in oil prices, while refiners have been able to maintain high margins across Q2 and Q3 2021, although we expected those margins to decline in Q4 due to seasonal effects.
Pent-up demand in the US saw seasonal driving demand return across Q3 as motorists continued to steadily increase miles driven across the quarter. This surge in consumption saw crack spreads widen substantially reaching highs not seen since 2014. We anticipate the strong growth in demand to moderate in 2022 and return to historic trends for developed markets, as peak economic growth occurred in Q2 2021. Should higher fuel prices push more consumer switching to EVs on lower operating costs and environmental concerns, we could see fuel margins retreat though this remains risk rather than the core view,” reads a report published by Fitch Solutions.
The outlook for RBOB gasoline prices is bearish for the quarter ahead as seasonal changes reduce consumption, according to the company.
“However, we expect prices to remain higher than in 2020 on high crude oil prices and continued restraints from underutilised refinery capacity. Our core view is for prices to start 2022 at higher levels, near the USd240/gal mark, before tailing off through the year as crude prices ease and markets remain well supplied.
We forecast 2022 RBOB NYMEX gasoline prices to average USd195/gal on cooling economic growth and lower oil prices as the year progresses. This is a higher revision from our earlier forecasts for prices to average USd191/gal, as we now expect oil prices to start the year on a stronger footing and refining margins to maintain the gains made during the strong recovery in demand. As gasoline stocks globally have been elevated, we see continued restraint from refiners as a key aspect of maintaining higher gasoline prices,” reads the report.
In addition, while the global economic recovery has seen bright spots in key developed markets and China, Fitch Solutions sees further scope for increased consumption from economies that have yet to fully return to pre-pandemic levels. Increased vaccination and wider community immunity should reduce further lockdowns as the years carry on leading to an uptick in gasoline consumption. “A significant portion of lost global consumption remains poised to return as these laggard economies rebound.”
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