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<Research>Citi: Oil Price May Surge to USD70/ bbl if Geopolitical Risks Escalate
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Although the market had expected a massive oversupply of crude oil at the beginning of the year, oil prices may continue to remain above many forecasts, Citi said in a research report. The report noted that recent events cannot fully explain the strength in prices. Brent crude oil is hovering around USD68/ bbl, notably above the approximately USD50/ bbl that may occur in an oversupply environment. Citi has long anticipated that the average oil price this year would be USD60/ bbl. Disruptions in Kazakhstan's production, severe cold weather in the US, geopolitical tensions in the Middle East, and tightened US restrictions on purchasing Russian oil collectively supported prices above USD60/ bbl. As US weather warms and Kazakhstan's Tengiz oil field returns, oil prices may moderate, and Brent-Dubai should come off (i.e. weaker Brent, stronger Dubai). However, if geopolitical tensions further escalate, oil prices could rise to the broker's 0-3 month target price of USD70/ bbl. AASTOCKS Financial News Website: www.aastocks.com |
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