Crude oil may collapse to $65 a barrel by the top of this yr and droop to $45 by end-2023 if a demand-crippling recession hits, Citigroup Inc. has warned.
That outlook relies on an absence of any intervention by OPEC+ producers and a decline in oil investments, analysts together with Francesco Martoccia and Ed Morse mentioned in a report. Brent, the worldwide crude benchmark, final traded close to $113 a barrel.
Oil has soared this yr following the invasion of Ukraine, and banks are actually attempting to chart its course into 2023 as central banks increase rates of interest and recessionary dangers mount. Citi’s outlook in contrast the present power market with crises of the Nineteen Seventies. At current, the financial institution’s economists don’t count on the US to dip into recession,
“For oil, the historic proof means that oil demand goes unfavourable solely within the worst world recessions,” the Citi analysts mentioned within the July 5 notice. “However oil costs fall in all recessions to roughly the marginal value.”
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