This year may be anything but staid for the oil market as Citigroup Inc. predicts wildcards including war, Middle East tensions, Donald Trump and Kim Jong Un driving crude toward $80 a barrel.
After prices were boosted by OPEC’s output curbs in 2017, the U.S. President has shifted the focus to geopolitical risks, with his pursuit of sanctions on Iran and North Korea potentially having significant consequences, the bank said. That’s in addition to political disturbances in some OPEC members like Iraq and Libya that could see crude supplies decline, boosting oil to levels between $70-$80, it said in a Jan. 9 report.
The decision by the Organization of the Petroleum Exporting Countries and its allies including Russia to curb production and drain a global glut helped oil rally for a second year in 2017. From a market-fundamentals perspective, investors are now watching to see whether the U.S. continues to expand its output, a threat which has rocked the oil industry in the past few years.
However, the most wide-ranging systemic risk to commodities this year could be President Trump [read more]