Citibank: Oil prices will continue to fluctuate sharply, awaiting clarity on the US-Iran agreement

Odaily Planet Daily News: Citigroup’s Global Commodities Research Head Max Layton stated that until clarity is reached on whether Iran and Trump can reach an agreement, oil prices will continue to fluctuate wildly. “It’s hard to predict whether Iran will reach an agreement; in this environment where you simply don’t know if an agreement will be reached, the market will inevitably be driven by news and experience sharp volatility.” On Thursday, crude oil prices fell for the third consecutive trading day. Layton said that part of this decline was due to “the market hoping both sides could start negotiations.”

However, pressure remains on the physical crude oil market in the Middle East. Traders said that in April, a key oil loading terminal off the Strait of Hormuz in Oman experienced shipment delays, disrupting transportation plans and possibly delaying deliveries to buyers. Layton stated that over the past 12 months, the global physical crude oil market has accumulated about 700 million to 800 million barrels of “considerable buffer stock,” adding, “We are rapidly consuming this inventory,” but its impact will “gradually become apparent over a longer period.” He also added that before making a real downward revision to oil price forecasts, he needs to see if Iran is genuinely prepared to negotiate seriously with the U.S.

Last month, after the second round of US-Iran peace talks failed to take place, Citigroup raised its Brent crude benchmark price forecast by $15 to $110 per barrel and delayed the expected reopening of the Strait of Hormuz benchmark from mid to late April to the end of May. (Jin10)