BAKU, Azerbaijan, Feb. 14
By Leman Zeynalova - Trend:
Across developed markets, tighter fuel standards and incentives will increase the penetration of electric vehicles (EVs), Trend reports with reference to Fitch Solutions.
The company has revised its 2022 gasoline price benchmark to USd220/gal on the back of stronger-than-expected demand and a crude oil price surge.
“We anticipate that RBOB NYMEX gasoline prices will remain elevated over H122, allowing daily prices to remain above USd240/gal – the average levels expected for early 2022 in our previous forecast.We point out a growing risk of an even tighter gasoline market in Q2-Q322 with elevated crack spreads, as the summer seasonal effect comes into play,” reads a report published by Fitch Solutions.
The company notes that the recovery in demand will continue to be strong over 2022 with only a limited risk of a slowdown on the back of stricter movement restrictions in reaction to the spread of Omicron and future variants.
“We note that in our demand forecasts we account for slowing GDP growth worldwide. For the US, we expect GDP growth to ease to 3.5 percent y-o-y in 2022, from 5.7 percent y-o-y in 2021, as private consumption slows. China is set to see a GDP growth rate of 5.4 percent y-o-y in 2022, as compared to 8.1 percent y-o-y in 2021. However, we do recognize certain risks to our healthy demand forecast. First, private consumption in the US could prove to be weaker than we currently expect, weighing on gasoline demand recovery in the largest consumer. On top of that, prolonged zero-Covid policy in China could translate into weaker consumer spending that would slow gasoline demand growth in the second-largest consumer,” the report says.
Fitch Solutions expects that 2023 will bring a slight drop in gasoline prices, from USd220/gal in 2022 to USd214/gal next year, as demand growth slows and new refining capacity comes online resulting in oversupply.
“Global gasoline consumption will grow 2 percent over 2023, after a 4.4 percent growth forecasted for 2022. At the same time, supply is set to remain strong next year with 25.5mn b/d of daily production, which is above the pre-COVID output of 24.7mn b/d for 2019,” said the company.
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