Citibank expects oil prices to continue to decline during the second half of this year, expecting Brent crude to fall to about $60 per barrel by the end of the year, with market fundamentals returning to the forefront after the turmoil in the Strait of Hormuz subsides.
The bank indicated that the improvement in navigation traffic through the strait, the return of crude flows to the markets, in addition to the continued weakness of Chinese demand, contributed to increasing global supply and putting pressure on prices.
Citibank explained that withdrawals from global inventories were less than expected, which reinforces indicators of surplus supplies during the coming period.
The bank believed that any price increases that might be witnessed during the summer would be temporary, as supplies continue to recover and the geopolitical risk premium declines, expecting Brent crude to move in a range between $60 and $65 per barrel by the end of the year.
