HOUSTON (ICIS)--Fitch Ratings raised its oil forecast for 2020 while lowering it for 2022, the credit-rating agency said on Tuesday.
Fitch expects Brent prices to reach an average of $41/bbl in 2020, up from its June forecast of $35/bbl.
Fitch raised its 2020 forecast to reflect the production cuts made by OPEC and its allies (OPEC+); looser lockdown measures for the coronavirus; and the economic recovery, it said.
In 2022, prices should reach $50/bbl, down from Fitch's earlier forecast of $53/bbl, it said. The lower forecast reflects the long stretch of growing inventories that was caused by the coronavirus.
The lower price also takes into account the long-term transition from fossil fuels to electric vehicles and renewable energy. Starting mid-decade, Fitch expects this energy transition will start to significantly reduce growth in oil demand.
Meanwhile, producers around the world can break even at lower oil prices. Fitch expects oil production to run well below its capacity.
Click here to view the ICIS Coronavirus, oil price crash - impact on chemicals topic page.