Global oil prices are very much in the news at present.
JPMorgan Chase analysts recently warned that global oil prices could reach a “stratospheric” $380 a barrel if Russia were to retaliate against the sanctions imposed by the G7 countries by cutting its crude oil output.
However, Citigroup has a different view, saying crude oil could collapse to $65 a barrel by the end of the year and possibly even slump to $45 by the end of 2023, if a recession brings on a destruction in the demand for energy.
Bloomberg reported Ed Morse, global head of commodity research at Citigroup, saying: “Almost everybody has reduced their expectations of demand for the year.”
Citigroup reduced its forecast by about a third to 2.4 million-2.5 million barrels a day and said ‘demand is simply not growing on an empirical basis to the degree that people had expected’.
According to Bloomberg, oil prices have increased significantly this year as global demand returned with economies slowly emerging from the pandemic. While crude prices are hovering around $100 a barrel, Citigroup reiterated its base case for oil prices at $85 a barrel, adding that supply is “accelerating” into year-end.
