Citi revised down on Monday its outlook for the WTI Crude price for next year by $5 to $49 a barrel, citing the global spike in coronavirus cases that is set to impact oil demand.
Citi Research also cut its estimate for Brent Crude by $5 a barrel to $54 per barrel, Reuters quoted the bank as saying in a note on Monday.
Two months ago, Citi was expecting oil prices to recover to $60 a barrel by the end of next year as the oversupply will have been drawn down by then, as major investment banks and analysts were fairly bullish on oil.
However, the surge in COVID-19 infections in recent weeks and the renewed lockdowns and curfews in major European economies—including France, the UK, Italy, and Germany—are pressuring oil prices downwards as the rebalancing of the oil market is once again slipping to a later than initially expected time.
In its note on Monday, Citi said that prices would be supported by OPEC+ not easing the cuts from January, as currently planned. The group will likely extend the cuts as-is through the end of the first quarter of 2021, according to Citi.