Fitch reiterates 2018 oil price outlook after OPEC+ deal expansion

MOSCOW, Dec 1 (PRIME) -- Global rating agency Fitch maintained its Brent oil price outlook for 2018 at U.S. $52.5 per barrel on the back of an OPEC+ oil production cut agreement prolongation, it said in a statement on Friday.

“High level of uncertainty supports our continued cautious stance on oil prices for 2018 and beyond, compared to current market prices. Our price assumptions include an average Brent price of $52.50 a barrel in 2018, rising gradually to $57.50 a barrel thereafter,” the statement read.

Many factors could affect this expectation, including production volumes in politically unstable regions, the scale of the US supply response to recent price increases, deteriorating compliance with the cuts, or the risk of disruptions to Venezuelan oil exports in the context of a PDVSA or sovereign debt restructuring, Fitch said.

In November 2016, OPEC and non-OPEC states agreed to reduce their oil production to rebalance the market. Russia joined the agreement in December 2016 with a promise to cut output by 300,000 barrels daily compared with the level of October 2016. The agreement was initially concluded for January–June, prolonged for nine more months in May and then until the end of 2018 on Thursday.

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