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Citi downgraded its outlook for the price of WTI crude for next year to $ 5 to $ 49 a barrel on Monday, citing the global peak in coronavirus cases that is expected to impact demand for oil.
Citi Research also lowered its estimate of Brent Brent from $ 5 a barrel to $ 54 a barrel, Reuters said, citing the bank in a note Monday.
Two months ago, Citi expected oil prices to climb back to $ 60 a barrel by the end of next year, as oversupply will have been reduced by then, major banks investment and analysts are rather optimistic about oil.
However, the surge in COVID-19 infections in recent weeks and the resumption of lockdowns and curfews in major European economies – including France, the UK, Italy and Germany – are driving down oil prices as the rebalancing of the oil market recedes again. at a later time than originally expected.
In its Monday memo, Citi said prices would be supported by OPEC + not easing cuts from January, as currently expected. The group will likely extend the cuts as is until the end of the first quarter of 2021, according to Citi.
In recent weeks, market talks have resumed that OPEC and its Russian-led allies would roll over current cuts for another quarter at the end of March, given the new lockdowns in Europe and the impact. negative they would have on the recovery in global oil demand.
In the clearest signal that OPEC + is considering at least such a step, Saudi Energy Minister Prince Abdulaziz bin Salman said on Monday that the current deal could be changed.
“I would say that this could be an adjustment even beyond what the so-called analysts are talking about,” Prince Abdulaziz bin Salman told the ADIPEC conference, as reported by Reuters.
Comments from the Saudis, OPEC’s largest producer and de facto leader, pushed oil prices up 8% early Monday, with WTI crude surpassing $ 40 a barrel at 7:15 a.m. ET, also supported by the weakening of the US dollar and Joe Biden’s victory in the US election, which stimulated appetite for riskier assets and removed electoral uncertainty from the market.
By Tsvetana Paraskova for OilUSD
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