Fitch Ratings on Q4 outlook for oil

The oil market has recently experienced relative calm after the price of Brent crude dropped to around $71 a barrel, its lowest level in a year. This stability comes amid concerns about demand primarily driven by economic factors in China and Europe, as well as structural changes such as the increased adoption of battery electric vehicles and LNG fuel trucks. Gabor Petroczi, Director of Natural Resources & Commodities at Fitch Ratings, shared insights on the current state of the oil market and the outlook for the future. Petroczi highlighted the impact of demand and supply dynamics on oil prices, emphasizing the role of OPEC in managing supply and the growth of supply from non-OPEC countries like North America, Brazil, and Guyana. Despite geopolitical tensions in the Middle East, market focus remains on fundamental factors rather than event risks. African sovereigns, heavily reliant on oil revenues, are expected to weather the current price scenario, with most producers remaining profitable and able to maintain stable dividends. Fitch Ratings projects a normalization of oil prices, with Brent crude expected to stabilize around $70 a barrel in the coming year. Overall, the outlook suggests a moderate decline in prices with ongoing volatility.