Home Forex News Oil Price Tanks As Citibank Analysts Tout $48 a Barrel Estimate In...

Oil Price Tanks As Citibank Analysts Tout $48 a Barrel Estimate In Q3

301
0
  • Surging U.S Oil Inventories
  • Waning Oil Demand Concerns
  • Citibank Oil Estimates

Oil prices were flat, but bearish on Thursday, after a 5% slip on Wednesday. The black gold has turned bearish in recent days as a spike in coronavirus infections in the U.S continues to rattle sentiments in the oil markets. A spike in U.S. crude inventories also continues to rattle traders fuelling the sell-off.

Oil Sell-Off

Oil prices have struggled to stay above the $40 a barrel level in recent weeks. Concerns that oil demand is not rising as expected, amidst production cuts, continues to fuel the sell-off. U.S West Texas Intermediate crude futures was down by 0.7% Thursday morning to $37.75 a barrel. Brent crude was also down by 0.7% to $40.01 a barrel.

Time                            : 06-25-2020

Pivot                           : $38.55

Technical View           : Long Above $38.35

Target                         : $38.15 next 3 targets are $36.44, $35.29 and $33.33

Comments                  : Weak Bearish

Last Price                    : $37.90

Amidst the ongoing sell-off, analysts at Citibank remain optimistic of oil prices rebounding over the next 18 months. The analysts expect Brent crude futures to average $48 a barrel in the fourth quarter and $61 a barrel in the fourth quarter of 2021.

The bullish sentiments stem from growing confidence that OPEC efforts and commitment to cutting oil supplies will have a significant impact on curtailing glut in supply. OPEC and its allies already have a 9.7 million a day barrel cut through July that is helping curtail glut in supply.

Oil Outlook

Amidst the production cuts, oil prices continue to edge lower amidst the ever-growing risk of coronavirus infections. Fears that a second wave of infections could result in lockdown measures is already arousing concerns of a persistent glut in supply on-demand dropping significantly

The U.S is fresh from reporting its highest number of coronavirus infections since April, affirming fears that the pandemic is here for the long haul. Rapid spread of coronavirus infections in North and South America and Asia should keep a lid on oil demand likely to trigger further sell-off in oil prices.

Reports that U.S crude stockpiles rose by 1.4 million driving inventories to record highs also signals the subdued demand levels in the oil markets.

LEAVE A REPLY

Please enter your comment!
Please enter your name here