BAKU, Azerbaijan, March 7. Fitch Solutions has revised down the forecasts for Brent crude oil price, Trend reports.
The company predicts in its latest report that Brent prices to stand at $90 per barrel on average in 2023, before dropping to $83 per barrel next year, as compared to $95 per barrel and $88 per barrel.
The prices have been lower than expected since early 2023 notwithstanding the optimistic market developments, Brent couldn’t break back into the 90s.
“That said, a healthy support line has been forming around USD80/bbl, which should help stave off any significant moves to the downside. Moreover, the fundamentals appear broadly balanced. The macroeconomic outlook remains challenging, but growth expectations seem to have bottomed out and, in some markets, have begun to rise. OPEC supply remains constrained, but there are considerable uncertainties around the outlook on Russia, while we expect significant gains in non-OPEC supply. Overall, we hold a neutral-to-bullish outlook for 2023, skewing to bearish next year,” reads the report.
Fitch Solutions notes that speculative positioning grew increasingly bullish over January and February, with the ratio of long to short managed money positions in Brent rising from 2.8 at the start of the year, to a peak of 10.0 in mid-February.
“Open interest, while remaining low in historical terms, has also risen considerably. All else equal, this should have translated into stronger price gains. However, market participants seem to have lacked conviction to move decisively either to the downside or the up.”
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