BAKU, Azerbaijan, Nov.22. Fitch Solutions now expects 2023 global crude oil prices settling below 2022 levels, while remaining elevated on the back of supply tightness, Trend reports Nov.22 via the company.
“We now expect 2023 Brent prices to average at SD95.0/bbl, down form our previous forecast of USD100.0/bbl and also down from 2022 estimated average of USD102/bbl. Although we recognise softening demand driving prices lower, tight supply will continue to support Brent prices leaving the next year's average above historical levels,” reads the report released by Fitch Solutions.
The company’s outlook for the global crude oil production growth next year remains muted with the expectation of a robust decline in production in Russia, as the result of a ban on Russian imports in Europe, and limited scope to divert further volumes of Russian crude to alternative markets, namely India, China and Turkey.
“OPEC+ has announced additional cuts in production to support elevated level of prices, further adding to the woes for global crude oil supply. As a bright spot, we highlight our forecast for growing output from the US shale patch, however elevated input costs and conservative spending plans are set to see the growth in output far below our initial expectations. We now see the US increasing total oil output by 5.8% y-o-y next year, however we see increasing downside risks to this forecast stemming from more conservative announcements from the operators and a sustained high cost basis.”
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