Fitch Ratings has cut its 2025 Henry Hub natural gas price assumption, reflecting lower year-to-date prices and inventory levels that have been above the five-year average. All base‑case assumptions for oil and European gas are unchanged.
The Brent and WTI oil price assumptions remain unchanged. We continue to expect global oil demand to increase by 700,000-800,000 barrels a day in 2025 and 2026, reflecting slower economic growth and the impact of the energy transition.
OPEC+ spare production capacity remains high at 4.6 million barrels per day (MMbpd). In September, OPEC+ is scheduled to increase production by 547,000 barrels a day, completing the unwinding of 2.2MMbpd of voluntary cuts, which have been in place since November 2023.
As part of OPEC+'s continued focus on its market share, it agreed at its September meeting to raise the production quota by a further 137,000 barrels a day in October and therefore commence the unwinding of 1.65MMbpd of voluntary cuts in place since April 2023.
The International Energy Agency forecasts global supply growth of 2.5MMbpd in 2025 and 1.9MMbpd in 2026, driven by OPEC+'s decision to unwind voluntary cuts and output increases in Brazil, Canada and the US. The market remains oversupplied with expected production growth exceeding consumption growth by more than 1MMbpd in 2025 and 2026.
Additional sanctions and tariffs targeting Russian and Iranian oil have added a risk premium to oil prices but are unlikely to tighten the market significantly, as Russian volumes continue to be sold into the oversupplied market. The EU has adopted a further sanctions package against Russia, including the lowering of the oil price cap to USD47.6 from USD60 a barrel and restricting imports of refined oil products derived from Russian oil.
The US has imposed an additional 25% tariff on imports from India due to the country's purchases of Russian oil and sanctioned a network of shipping companies and vessels related to the transportation of Iranian oil.
The reduced short-term Henry Hub price assumption reflects year-to-date prices and inventory levels that have been higher than the five-year average in 2025. We expect inventories to decline below the five-year average in 2026 due to increasing LNG exports and we have kept the remaining Henry Hub assumptions unchanged.
The TTF price assumptions are unchanged, with EU gas storage 77% full and on track to meet the 90% target by 1 November, leaving ample stocks for winter. Spot TTF prices, which are slightly above the Asian JKM benchmark, are encouraging LNG flows to Europe.
We have adjusted the 2025 stress-case prices for Brent, WTI and TTF to align them with a stress scenario that incorporates the prices recorded this year and we have moved the trough point to 2026 for oil stress-case prices.
Source: Fitch Ratings