Two leading multinational investment banks and financial services companies, Citigroup and Goldman Sachs have offered contradictory forecasts on crude oil price for 2022.
Recall that Russia’s invasion of Ukraine in February has led to a sharp rise in global oil prices amounting to more than 100 dollars per barrel.
Oil prices rose on Wednesday, clawing back some of Tuesday’s heavy losses as supply concerns returned to the fore and outweighed lingering worries about a potential global recession.
Brent crude futures rose by $1.43, or 1.39 per cent, to $104.20 a barrel at 1120 GMT. U.S. West Texas Intermediate (WTI) crude climbed 65 cents, or 0.65 per cent, to $100.15 a barrel after closing below $100 in the previous session for the first time since late April.
While Citigroup forecasted that crude oil price will fall to $65 by the end of 2022, Goldman Sachs had forecasted that crude oil would sell at $140 between the last six months, stating that while the price was “tremendously high right now”, it presents an opportunity for buyers to invest, as the price still has a long way up.
According to Citigroup forecast, the price of crude oil will fall by -56.22 per cent within the next one year and six months, when compared to the current cost of $102.8 per barrel, dropping $57.8 during the period.
Citigroup stated that the dip in price will be driven by dwindling oil investments and global recession, considering demands for the product usually falls during the period, negatively affecting the cost of oil in the global market.
The bank also listed the lack of rising supply by the Organization of Petroleum Exporting Countries and its allies (OPEC+) to tame the out-of -control crude oil price.
“But oil prices fall in all recessions to roughly the marginal cost.” Citigroup’s analysts, Francesco Martoccia and Ed Morse, said in the firm’s new notice to the market regarding the forecast for this year and next.
Source: blueprint.ng
