A faltering global economy may start eating into demand for oil as early as this year, pushing prices lower, Fitch Ratings' senior director Dmitry Marinchenko told Reuters in an interview.
He said that the rating agency expects global economic growth to slow to 2.8% in 2019-2020 from 3.2% in 2018.
"If the global growth slowdown becomes more pronounced, or even if recession materializes, then demand for oil could fall sharply, which is the main risk for global oil prices." he said.
Fitch Ratings sees 2019 oil prices averaging around $65/bbl, falling to $62.50 in 2020 and $57.50 by 2022.
The price of Brent crude is currently testing $70/bbl, its highest this year, following cooperation between the OPEC and other large oil producers led by Russia to cut supply.
U.S. sanctions against Iran and political and economic turmoil in Venezuela have also capped output.
The OPEC-led group agreed to cut their combined oil production by 1.2 million barrels per day for six months starting from January 1.
The next OPEC and non-OPEC meeting is expected to be held in June to discuss an extension of the supply cuts.
Marinchenko said the future of the deal would likely hinge on the situation in Venezuela and Iran. He said it was possible the size of the cuts could be adjusted.
"Oil production in Venezuela will continue to decline, the quotas will have to be revised."
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