Citibank: If US-Iran negotiations continue to stall, oil prices may rise further
Source: Global Market Report
Citibank stated that if negotiations between the US and Iran continue to stall, oil prices may rise further; although the decline in crude oil inventories, the release of US Strategic Petroleum Reserves, weakening demand, and temporary easing of tensions have played a buffering role.
Citi said that the baseline scenario still anticipates that supply disruptions in the Strait of Hormuz will ease by the end of May, but the increasing difficulty for the US and Iran to reach an agreement has raised the short-term upside risks for oil prices.
The bank maintains its Brent crude oil price forecast at $120 per barrel for the next 0 to 3 months; it expects Brent crude oil to average $110 per barrel in the second quarter, fall back to $95 per barrel in the third quarter, and further decline to $80 per barrel in the fourth quarter.
However, Citi pointed out, "We still believe that the crude oil market is underestimating the duration of risks and tail-end extreme risks at present."
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