BAKU, Azerbaijan, October 23. In a noteworthy update, BMI, a Fitch Solutions company, a leading global provider of economic and financial data, has revised its 2024 gasoline price forecast from $228 per gallon to $235 per gallon for this quarter, Trend reports.
While the underlying belief in a softening trend in gasoline prices next year remains unchanged, the new projection reflects an 8 percent year-on-year (y-o-y) decline, which is notably smaller than the initially anticipated 10.5 percent y-o-y drop in annual averages.
This more optimistic outlook is rooted in two key factors. Firstly, BMI now anticipates Brent prices to average $84 per barrel in 2024, up from the initial forecast of $83 per barrel. Secondly, the average crack spread levels in 2023 were previously underestimated. As a result, a milder decline in 2024 is now expected. In 2023, crack spreads were initially projected to average $18.4 per barrel. However, their outperformance from Q2 to Q3 2023 led to an upward revision to $23.0 per barrel. This upward adjustment supports a revised long-term gasoline crack spread curve, making crack spreads more resilient. This change raises the average Brent-gasoline price differences from $11.2 per barrel to $15.2 per barrel in 2024, from $9 to $11.25 per barrel in 2025, and from $8.0 per barrel to $10 per barrel in 2026.
The shift in average gasoline prices in 2024 is expected to be influenced by the accelerating growth in global gasoline production. BMI forecasts a 1.8 percent y-o-y increase in gasoline output for 2024, a substantial improvement compared to the minimal 0.2 percent y-o-y growth witnessed in 2023. Leading this surge in production growth are China, the United States, and India, contributing a combined total of over 250,000 barrels per day to motor gasoline output. This accounts for 52 percent of the overall increase in output, which is estimated at 482,000 barrels per day.
Among the 88 countries tracked for downstream production, BMI predicts that 44 will raise their output, while 18 are set to experience a decline. Notably, countries such as Japan, Germany, and South Korea are expected to witness a collective decline in output by 48,000 barrels per day in the coming year.
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