BAKU, Azerbaijan, June 15. Brent crude has fallen below the key psychological marker of USD100/bbl, as recession fears drive price action in the market, Trend reports with reference to Fitch Solutions.
“In our view, the downturn in prices has been largely speculatively in nature, with a liquidation of long positions pushing the front-month contract below key price levels and triggering trend-following fast money flows,” reads the report released by the company.
While economic headwinds have mounted over the course of the year, the global economic outlook of Fitch Solutions remains relatively robust, with real GDP growth expected to come in at around 3 percent both this year and next.
“And, despite large-scale strategic storage releases and demand-side weakness in China, the market has remained extremely tight, as reflected in strong physical price differentials. Production increases among US shale producers, OPEC+ members and potentially Iran will help boost supply, but the upside is limited, while expected further export declines in Russia, the winding down of strategic storage releases and continued strong demand growth should support prices against elevated macro risks. We hold to our current forecast for Brent crude to average USD105/bbl in 2022, falling to USD100/bbl in 2023,” reads the report.
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