Fitch said that while the gap between oil supply and demand appears to have peaked at three million barrels per day in Q2 2015, the market is unlikely to balance until H2 2016 at the earliest when it will still have to digest elevated oil stocks.
“We have therefore effectively pushed back the slow recovery we had assumed by one year and now include a modest price recovery only in 2017,” noted Fitch.
The agency added that its new assumption is for Brent to average $55 a barrel in 2016 and $65 a barrel in 2017, with WTI averaging $50 a barrel in 2016, rising to $60 a barrel in 2017.
“We have also lowered our long-term price deck for Brent to $75 a barrel,” said Fitch, noting however that its long-term assumption for WTI is unchanged at $70 a barrel.
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