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Fitch Solutions Macro Research (a unit of Fitch Group) has made a downward revision to its annual average price forecast for Brent for 2019, from $75 per barrel to $73 per barrel, Trend reports with reference to the company.

Oil has made substantial gains in the year-to-date (YTD) period, rising by around 23 percent, to reach $66.3 per barrel at the time writing, said Fitch Solutions.

"However, almost 10 percent of the total gain occurred over the last two weeks, while sideways trading from mid-January to mid-February has left the YTD average languishing at $62.1 per barrel.

We have adjusted down our forecast to reflect the softer start to the year, but our underlying bullish narrative is unchanged, with positive but slower global economic growth and supply management from OPEC," said the company.

Fitch Solutions believes that market conditions will be broadly supportive of risk assets in 2019, with global growth softening only gradually and policymakers taking steps to subdue volatility. "Sentiment has been buoyed by a shift in global monetary policy, with the G3 and a host of emerging markets (EMs) changing stance to neutral or dovish in recent months."

The pause in the US’ rate-hiking cycle also feeds into a softer outlook on the dollar, offering further relief to the wider commodity complex, according to Fitch Solutions.

"Investors are gradually returning to crude and the ratio of long to short positions in Brent has recovered from a low of 2.2 in December to 6.4 as of the end of February," reads a report from the company.

In view of Fitch Solutions, recession risks are overblown and the global economy will outpace expectations , supporting oil through the impacts on both physical demand and sentiment.

"Our economists forecast real GDP growth of 3 percent y-o-y for 2019, easing from the 3.4 percent we estimate for 2018. The slowdown is being led by developed markets (DMs), where we expect growth to drop by 0.5 percent averaging 2 percent for the year. In contrast, EM growth will stay broadly stable at 4.6 percent, from 4.7 percent last year. This is positive for Brent, given that EMs are the dominant source of demand growth," said the company.