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Citi Warns Oil May Collapse to $65 by the Year-End on Recession

Commodities Jul 05, 2022 02:27AM ET
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© Reuters. Citi Warns Oil May Collapse to $65 by the Year-End on Recession
 
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(Bloomberg) -- Crude oil could collapse to $65 a barrel by the end of this year and slump to $45 by end-2023 if a demand-crippling recession hits, Citigroup Inc. has warned.

That outlook is based on an absence of any intervention by OPEC+ producers and a decline in oil investments, analysts including Francesco Martoccia and Ed Morse said in a report. Brent, the global crude benchmark, last traded near $113 a barrel.

Oil has soared this year following the invasion of Ukraine, and banks are now trying to chart its course into 2023 as central banks raise interest rates and recessionary risks mount. Citi’s outlook compared the current energy market with crises of the 1970s. At present, the bank’s economists do not expect the US to dip into recession.

“For oil, the historical evidence suggests that oil demand goes negative only in the worst global recessions,” the Citi analysts said in the July 5 note. “But oil prices fall in all recessions to roughly the marginal cost.”

©2022 Bloomberg L.P.

 

Citi Warns Oil May Collapse to $65 by the Year-End on Recession
 

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Comments (5)
sharath naik
agsn Jul 05, 2022 12:39PM ET
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the primary issue is Saudi has been lying about their oil reserve.. they cannot boost oil output by what they say they can. so recession or not. oil will keep high unless venezualla and Iran is allowed back into the market.
Joe Rizzuto
Joe Rizzuto Jul 05, 2022 8:12AM ET
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last week jpmorgan prices oil target at $380 ... this week citi at $65 !!
lup sup
lup sup Jul 05, 2022 8:12AM ET
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Next week $1380
Varun Agrawal
Varun Agrawal Jul 05, 2022 7:48AM ET
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all fools game .... if thier isntecession fears why is oil not falling ....
Crypto Current
Crypto Current Jul 05, 2022 7:17AM ET
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Oil collapse to 165$. Fixed
Jim Herndon
Jim Herndon Jul 05, 2022 6:44AM ET
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You got the “off the wall” to grab eyes headline but it is a real stretch . Think about it before you put it to print.
 
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