WTI Crude •6 hours | 52.27 | -0.86 | -1.62% | |
Brent Crude •3 hours | 55.41 | -0.69 | -1.23% | |
Natural Gas •6 hours | 2.446 | -0.045 | -1.81% | |
Mars US •6 hours | 53.02 | -0.86 | -1.60% | |
Opec Basket •2 days | 55.14 | -0.61 | -1.09% | |
Urals •31 days | 42.22 | +0.00 | +0.00% | |
Louisiana Light •2 days | 54.90 | -0.31 | -0.56% |
Marine •23 hours | 55.13 | -0.44 | -0.79% | |
Murban •23 hours | 55.57 | -0.19 | -0.34% | |
Iran Heavy •23 hours | 51.58 | -0.58 | -1.11% | |
Basra Light •23 hours | 57.04 | -0.62 | -1.08% | |
Saharan Blend •23 hours | 54.87 | -0.57 | -1.03% | |
Bonny Light •23 hours | 54.72 | -0.55 | -1.00% |
Canadian Crude Index •2 days | 40.08 | +0.03 | +0.07% | |
Western Canadian Select •6 hours | 39.23 | -0.33 | -0.83% | |
Canadian Condensate •22 hours | 52.13 | -0.18 | -0.34% | |
Premium Synthetic •22 hours | 53.53 | -0.18 | -0.34% | |
Sweet Crude •6 hours | 48.13 | -0.18 | -0.37% | |
Peace Sour •6 hours | 46.88 | -0.18 | -0.38% |
Louisiana Light •2 days | 54.90 | -0.31 | -0.56% | |
Domestic Swt. @ Cushing •23 hours | 48.75 | -1.00 | -2.01% | |
Giddings •23 hours | 42.50 | -1.00 | -2.30% | |
ANS West Coast •3 days | 56.32 | -0.51 | -0.90% | |
West Texas Sour •23 hours | 46.22 | -0.86 | -1.83% | |
Eagle Ford •23 hours | 50.17 | -0.86 | -1.69% |
The International Energy Agency cut…
Investors are becoming increasingly bullish…
Fitch Ratings has slashed its short- and medium-term oil price assumptions, expecting a record glut in 2020 that will keep the market off balance at least in the next two years.
Fitch slashed its average base-case 2020 price assumption for Brent Crude to $41 a barrel from $62.50 expected before the coronavirus pandemic and the OPEC+ deal collapse. For WTI Crude, Fitch now assumes an average price of $38 per barrel this year, down from an earlier assumption of $57.50.
In Fitch’s stress-case scenario, Brent Crude is expected to average $36 a barrel while WTI Crude is seen averaging $33 per barrel in 2020.
The enormous demand destruction from the coronavirus outbreak and the all-out oil price war between Saudi Arabia and Russia will lead to a massive record-breaking oversupply on the market this year, according to Fitch Ratings.
“This could keep the Brent price below USD40/bbl for the rest of this year, as the magnitude of oversupply in 2020 in various scenarios is likely to be much larger than the maximum of 1 million barrels a day (mmbpd) seen in the past decade,” the credit rating agency said.
Fitch sees the market gradually rebalancing over the next two-three years when demand will have recovered from the pandemic, U.S. shale would have declined because of unsustainable current prices, and OPEC possibly forging a new deal as both Saudi Arabia and non-OPEC Russia would feel the pain from their oil price war.
Related: Russia Needs Higher Oil Prices, But Won't Surrender
“Both Saudi Arabia and Russia, the key parties to OPEC+, have fiscal break-even Brent prices above current market prices, at USD91/bbl and USD53/bbl, respectively,” Fitch said.
Apart from slashing near and medium-term price assumptions, the rating agency also cut its long-term assumptions “to reflect continued efficiency gains, low break-even oil prices of many greenfield projects and a potential for demand to slow due to energy transition.”
For the long term, Fitch’s current assumptions are Brent at $55, down from $57.50 expected earlier, and WTI at $52 a barrel, down from $55 previously.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.