Oil price outlook volatile, says Moody’s

Oil drilling rigs

Oil prices will remain volatile this year, but will receive some support from supply shortages, Moody’s Investors Service said in a recent report.

The credit rating agency expects that the average oil price this year will remain below $100 a barrel, which is the same as the average for Brent crude last year.

Moody’s said that the trajectory for oil prices this year “remains uncertain and depends on economic outcomes in major economies.”

“The decline in oil prices since June reflects reduced market expectations for growth in oil demand amid heightened recession risks in the US and Europe and a short-term decline in oil demand from China amid COVID restrictions,” the report said.

Moody's warned that the continuation or exacerbation of economic weakness in major economies may lead to a further decline in oil prices.