Fitch rating agency lowered forecast for gas prices in Europe – Kommersant
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The international rating agency Fitch Ratings has significantly reduced its gas price forecasts in Europe for 2023 and 2024. According to press release, spot gas prices on the TTF index will drop to $12 and $10 per 1,000 cubic meters. feet ($423.6 and $353 per 1,000 cubic meters).
Fitch Ratings attributes this forecast to “an increase in global LNG supplies in the medium term”, “a high level of LNG stock in storage”, as well as building up the LNG infrastructure in Europe. The agency’s forecasts for 2025 and 2026 remained at $10 and $5 per 1,000 cubic meters. feet (in terms of $ 176.5 per 1 thousand cubic meters in three years).
According to the agency, at the moment cooperation between European countries is “gradually improving” and “will help bring prices down to a normalized sustainable level.”
By data Intercontinental Exchange, during trading on June 15, the value of contracts for the supply of gas in July at the TTF hub in the Netherlands rose by almost 30%. At the rate Bloomberg, Europe’s energy security is “still vulnerable even after building up unusually large gas reserves in preparation for next winter.” Gas has risen in price to a maximum since the beginning of April, in June the price increased by 70%.
Prices have been declining since the end of 2022, then in May this year, for the first time in the last couple of years, prices did not fall below $300 per 1,000 cubic meters. m. The record level was reached in the first days of last spring – $ 3892 per 1 thousand cubic meters. m.
Fitch Ratings has lowered its gas price forecast for the Henry Hub, a major hub in the US. For 2023 and 2024, the expected cost of gas at this site has been reduced from $3.5 to $3 per thousand cubic feet. The agency attributes this to “sustainable U.S. gas production” in excess of consumption. Another reason is the slow decline in the number of drilling rigs.
Brent oil price forecast for 2023 also decreased. This year the price will be $80 per barrel against $85 in the previous forecast. The forecast for 2024 remained at $75 per barrel.
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