Fitch also assumes a Henry Hub natural gas price of $2.25 per thousand cubic feet for the year compared to previously expected 2.50 per thousand cubic feet.
Long-term base case price assumptions of Fitch are unchanged at $65 a barrel and 3.25 per thousand cubic feet.
The reduction is due to a combination of stock build-up over the mild winter, higher-than-expected OPEC production in January and increasing evidence that global economic growth for the year will be weaker than we previously forecast, Fitch said in a report.
“This suggests there will still be a supply surplus in the second half of 2016, albeit reduced from current levels, and that markets will probably only reach a balance in 2017. Even then, very high inventories will limit price increases,” the report said.
According to OPEC`s monthly report, released on Feb.10, cartel`s 13 members produced 32.335 million bpd in January, about 130,700 bpd more than December 2015.
Crude oil output increased mostly from Nigeria, Iraq, Saudi Arabia and Iran, while production showed a decrease of from Angola, Venezuela and Algeria.
Oil prices fell four percent after Saudi Arabia’s oil minister Ali Al-Naimi ruled out any production cuts, saying the kingdom`s rationale on maintaining output was that demand would pick up any excess supply.
Brent crude was down to $32.51 a barrel, while WTI fell to $30.93.
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