US credit rating agency Fitch on Wednesday sharply cut its forecasts for natural gas prices in Europe and lowered its expectations for crude oil on the back of “weaker demand and robust supply” in the near term, APA reports citing ICIS.
The US agency cut sharply its forecast for the natural gas European benchmark TTF: it now expects TTF to end 2023 at $12.0/million cubic feet (mcf), a decrease of 40% compared to its prior forecast.
Equally, TTF is now expected to end 2024 at $10.0/mcf, halving its prior forecast.
The agency said it had reduced its natural gas price forecasts for Europe on the back of “ample” liquefied natural gas (LNG) supplies into the region, curtailed demand, and high storage levels, which currently stand at 69%, well above comparable periods, it said.
“Other TTF price assumptions remain unchanged as an increase in global LNG supply in the medium term, the build-up of LNG infrastructure in Europe and gradually improving European interconnectivity will help reduce prices to the normalised levels in a sustainable manner in the medium to long term,” said Fitch.
The agency cut its crude oil price forecast for 2023 by nearly 6% for Brent – the international reference – and by 6.25% for the US reference WTI.
However, the agency upgraded its price forecast for crude oil for the mid-term as demand is expected healthier in the second part of this decade, it said.
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