Expected price to reach $60 per barrel within 12 months
The bank reduced the possibility of a large price jump to 10% from 20% previously
Expected to reach $70 per barrel within 3 months
Source:
Asarq
Citigroup on Monday cut its forecast for Brent crude prices by $12 a barrel for next year, as the risk premium from geopolitical tensions in the Middle East recedes.
The group’s analysts expect the price to reach $60 a barrel within a period of 6 to 12 months, compared to their previous estimate of $72.
The analysts ruled out in a research note that the Israeli attack on Iran last Saturday would lead to “an escalation that would affect oil supplies.” Israel launched three waves of strikes on military targets in Iran, avoiding targeting oil and nuclear facilities, which gave some comfort to markets that were anticipating this strike to see its impact on prices.
In the near term, Citigroup expects Brent prices to reach $70 a barrel within the next three months, compared to $74 in a previous estimate.
Citigroup also cut its forecast for a major oil price spike to 10%, from a previous estimate of 20%. But it noted that risks remain.
Brent crude for December delivery fell more than 6% to $71.29 a barrel at 5:58 a.m. New York time, as markets digested the Israeli attack.
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