2025 ‘Storm’ Predicted by Citigroup
- Citigroup maintains bearish view on crude oil prospects
- 2025 target price for Brent benchmark set at $60/bbl
- Current fundamentals show mixed signals
- Backwardation and physical differentials suggest a tight market
- Crude oil supply issues in the Atlantic Basin contributing to apparent strength
- Citi advises clients to hedge against downside risk
- Limited compliance with promised cuts by OPEC+ countries
- Oil-on-the-water inventories rebounding
- OPEC+ unleashing additional oil while demand is suppressed
Citigroup retains a bearish view on the prospects for crude oil later this year and into 2025. They have set a target price of $60/bbl for the Brent benchmark in 2025. While current fundamentals are mixed, there are signs of a tight market with backwardation and physical price differentials suggesting strength. Citigroup attributes this apparent strength to crude oil supply issues in the Atlantic Basin. However, they believe that the second quarter of 2024 will see crude balances tilt toward surplus and advise clients to hedge against downside risk. Limited compliance with promised cuts by OPEC+ countries and the rebounding of oil-on-the-water inventories further contribute to the bearish outlook. Additionally, OPEC+ has unleashed additional oil at a time when deep refinery maintenance has suppressed demand.
Factuality Level: 3
Factuality Justification: The article contains a mix of actual and metaphorical references to weather and uses language that may be confusing to readers. It includes details that are tangential to the main topic, such as specific price differentials and market dynamics, which may not be relevant to all readers. The article also presents the bank’s perspective as if it were a universally accepted truth without providing a balanced view or alternative perspectives. Overall, the article lacks clarity and may be misleading to readers who are not familiar with the oil market.
Noise Level: 3
Noise Justification: The article provides a detailed analysis of the petroleum market, including current fundamentals, market structures, and potential supply issues. It offers insights into Citigroup’s bearish view on crude oil prospects and provides specific examples to support its claims. The article stays on topic and does not dive into unrelated territories. However, it lacks scientific rigor and evidence to support some of the predictions made, which slightly reduces the overall rating.
Financial Relevance: Yes
Financial Markets Impacted: Crude oil markets
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article discusses the bearish view of Citigroup on the prospects for crude oil, mentioning the current mixed fundamentals and tight market conditions. However, there is no mention of any extreme events or their impact.
Public Companies: Citigroup (C)
Key People: Tom Kloza (Reporter), Michael Kelly (Editor)
Reported publicly:
www.marketwatch.com 
