Citi’s $60 Oil Call Meets $112 Brent
Julianne Geiger is a veteran energy journalist and market analyst with more than a decade of experience covering the global oil and gas sector.
Her… Citi sees more upside risk for oil prices despite recovering Middle Eastern crude exports, a considerably less bearish assessment from the bank that predicted$60-to-$65 Brentby year-end just three months ago.
Brent December futures traded at$111.70on Thursday, up $2.88, or 2.65%, after touching $112.68 earlier in the session.
The problem, Citi says, is that getting crude out of the Gulf and getting it to buyers at a reasonable cost are two different things.
More than 1 million barrels per day of Gulf crude was transferred between vessels in September, representing about 7.5% of regional exports.
Before the U.S.-Iran war, these transfers were virtually nonexistent.
Freight rates for very large crude carriers traveling from the Gulf to China recently approached $250 per metric ton, or roughly $35 per barrel, Citi estimates.
That's more than 20 times the previous decade's average.
Excluding Iran, Gulf crude exports recovered to more than 81% of prewar levels in September, aided by increased Saudi shipments.
Iran's own exports have fallen to zero under a U.S.
Before the war began in February, the Strait of Hormuz handled about one-fifth of the world's oil and LNG supplies.
Citi has had to rethink its oil market outlook repeatedly.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
Comments
Post a Comment