(Reuters) – Citi Research on Monday upgraded its bull case scenario for oil prices for this quarter and the next, citing greater potential for the market to fear or realize supply losses during these months due to growing conflict in the Middle East.
The bank upgraded its bull case for the fourth quarter of 2024 and the first quarter of 2025 from $80/barrel to $120 per barrel (bbl).
“However, we maintain our baseline forecast of $74/bbl Brent in 4Q24 and $65/bbl in 1Q25, reflecting weak underlying fundamentals in the oil market,” Citi added.
It also says it is sticking to its bear scenario, in which OPEC+ increases production from December, and a reduction in oil supply risks with an indicative probability of 20% for Q4 2024 at $60/bbl and for 1Q/25 at $55/barrel. .
Brent crude futures were trading around $77 a barrel on Monday, while U.S. West Texas Intermediate crude futures were trading at $74 a barrel.
The bank said that, after a review of the major geopolitical risk events since the 1950s, the main conclusion was that historical events that potentially or actually affect oil supplies tend not to last longer than a few quarters at most.
(Reporting by Anjana Anil and Brijesh Patel in Bengaluru; Editing by Matthew Lewis)
