Fitch Solutions Macro Research (FSMR) has revised down its Brent oil price forecast for 2020, a new report by the company has revealed.

FSMR now sees Brent averaging $62 per barrel this year, which marks a $3 drop compared to its previous forecast in January.

“An already bearish outlook for Chinese demand in 2020 looks set to worsen, compelling us to revise down our 2020 price forecast,” FMSR said in the report, which was sent to Rigzone.

“The outbreak of the novel coronavirus in China has hit oil markets as uncertainty around the full impact grows,” the report added.

FSMR went on to state that there is a signiﬁcant further downside risk to oil prices for at least the ﬁrst half of 2020 as the peak of the virus has yet to be established.

“While the full extent of the demand impact remains a key unknown, early indications are that we are experiencing a sharp downturn in reﬁnery runs and crude imports into China,” the report said.

“We caution that the virus may further signiﬁcantly curtail overall fuels consumption growth in China for the year with a heavy impact on jet fuel demand growth,” the report added.

FSMR’s Brent oil price forecast from 2021 to 2024 remains unchanged from January’s predictions. The company projects Brent to average $63 per barrel in 2021, $62 per barrel in 2022 and $64 per barrel in both 2023 and 2024.

The Bloomberg consensus, which was highlighted in FSMR’s latest report, forecasts that the price of Brent crude will average $63.1 per barrel this year, $63 per barrel in 2021, $61 per barrel in 2022, $67 per barrel in 2023 and $60 per barrel in 2024.

On December 31, 2019, the World Health Organization (WHO) was alerted to several cases of pneumonia in Wuhan City, Hubei Province of China. On January 7, Chinese authorities confirmed that they had identified a new virus. The new virus is a coronavirus, according to WHO, which is a family of viruses that include the common cold, SARS and MERS.

Following the outbreak of the virus, OPEC+ has signaled that it stands ready to take appropriate actions to maintain oil market stability.

To contact the author, email andreas.exarheas@rigzone.com