Citigroup projects crude prices as low as $55 per barrel next year
August 27, 2024
The markets seem to be suffering from headline fatigue. The news seems to be increasingly repetitive, and market reactions have been more muted. The energy markets have been in a big trading range for over a year and that looks to continue. If you just look at WTI crude it has been in the $70-$90-dollar range since the end of 2022.
If the news is bullish the market runs up and tests that $90 level, but will not break out to the upside. If the news is bearish prices creep toward the $70 level. As more talk of an oil surplus from OPEC+ materializes, the group faces a decision on whether to idle production in a market that does not appear to need the extra output. This could soften the price but $70 will be a big level to break if the market is going to finally break through its ranges.
According to the IEA, even if OPEC+ calls off its scheduled production increase, global markets will soften next quarter as inventories rapidly deplete.
Citigroup Inc. sees crude price falling as low as $55 per barrel next year, while DNB Bank ASA warned that prices may fall to $60 dollar per barrel if OPEC+ sticks with it plans. Goldman Sachs sees downside risks to next year’s likely range of $75 to $90 dollars per barrel range.
Energy prices are a bit softer to start out this day on likely profit taking after a strong price run up.