Fitch: The biggest downside risk to the oil market in 2023

According to the oil price network news on November 17, the short-term oil price forecast has been bullish this year, and most forecasters expect the benchmark oil price to exceed $
100 sometime next year.
However, things change
in the long run.
Goldman Sachs, for example, said in a note this week that it expects oil prices to soar to $
125 a barrel.
Its base forecast for Brent crude prices in 2023 is $
110 per barrel.

At the very least, though, Fitch Solutions believes that things seem to change
in the long run.
In a report exclusively shared with Rigzone, the company said it expects oil prices to fall from $102 this year to $95 in 2023 and further to $
85 in 2026.

The reason for this expectation that oil prices will fall over the next three years is the macroeconomic backdrop, which has been warning
of recession in many parts of the world for months.
Fitch is by no means alone in this expectation
.
Many analysts expect a recession, although not everyone agrees on
the direction of oil prices as a result of these economic trends.

It was because of recession fears that OPEC itself lowered its forecast for oil demand, which earlier this year grew at a healthy pace despite rising oil prices
.
However, in the latest Oil Market Monthly Report, this is not the case
.
OPEC said in the report that economic factors affecting oil prices were tilted to the downside and revised demand growth expectations by 100,000 b/d
.

How strong the impact of recession expectations is on oil prices is revealed almost daily: in media reports about oil prices, recession fears are the cause of the drop in oil prices in any trading session, more frequently than other factors
.

At the same time, forecasts of recession are constantly emerging, especially for Europe
.

Speaking about the EU's economic outlook, Holger Schmieding, chief economist in Berenberg, told CNBC: "Consumer confidence has fallen sharply and a recession may not be superficial
.
”

Growth in the eurozone is expected to contract to 0.
2%
in the third quarter from 0.
8% in the second quarter.
That's still a positive number, but economists seem skeptical that the EU will face the challenge of refilling gas storage facilities next year
.

John from Reuters? In an op-ed earlier this month, John Kemp noted that a recession would certainly weigh on oil prices
.
He said in the letter that while many economists in official positions spin around the word "recession" without actually using it, the U.
S.
slowdown has begun
.
This is also evident
in the EU.

The question, then, is how far
the economies of these economies will slow down.
The slower their economies recover, the greater the disruption to demand for oil, and therefore the greater the impact on international prices
.