Oil could collapse to $65 a barrel by the end of this year, but also to $45 by the end of 2023, in the event of a recession that destroys demand, Citigroup warned.
According to the Citi report, this case is based on the absence of any intervention by OPEC+ producers and a potential reduction in oil investment.
It is noted that Brent crude, the global benchmark for oil prices, traded last week above $113 a barrel.
Citi’s outlook compares the current energy market to the energy crises of the 1970s, but at this stage the bank’s economists do not expect the US to sink into recession.
“For oil, historical data shows that oil demand turns negative only in the worst global recessions,” Citi analysts said in a note yesterday. But as they add, “but oil prices fall in all marginal cost recessions.”
Source: Capital
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