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Oil prices are likely to stay higher than $60 per barrel over the medium term, Moody’s said on Wednesday, as reported by LiveSquawk.
According to the credit rating agency, global oil prices will likely remain higher than the mid-point of its medium-term range of $50 to $70 per barrel.
In a new report on Wednesday, Moody’s said that its global energy outlook is stable for 2022 as prices hold firm. However, costs are rising, which will limit gains in earnings for companies.
“Gains in earnings for oil and gas producers will be more limited in 2022, after a substantial rebound in 2021, with a more rational supply/demand balance but also rising costs,” Moody’s said.
Last week, Fitch Ratings revised up its 2022 and 2023 oil price assumptions for Brent and West Texas Intermediate (WTI) to reflect improved demand and expectations that OPEC+ will continue to manage supply, at least in the short to medium term.
Fitch Ratings sees Brent Crude averaging $70 per barrel in its base case for 2022, up from $55 per barrel expected earlier. WTI Crude prices are expected to average $67 per barrel next year in Fitch’s base case scenario, up from a $52 a barrel projection before. In 2023, Fitch assumes a $60 Brent price, up from $53 per barrel, and WTI at $57, up from $50 expected earlier.
The raging agency also raised its assumptions for the European gas benchmark, Title Transfer Facility (TTF), for 2022, as well as the U.S. Henry Hub gas price assumptions for 2022-2023, on the back of ongoing supply disruptions.
Fitch left its long-term oil and natural gas price assumptions unchanged. The long-term oil price assumptions were kept unchanged and reflect Fitch’s view on the marginal cost of supply and energy transition risks.
“We have increased our near- and medium-term assumptions but recognise that the situation in the commodity markets remains highly uncertain given the emergence of the Omicron coronavirus variant, which may result in renewed lockdowns and travel restrictions and may increase price volatility in the near term,” Fitch Ratings said.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.