The price of oil has skyrocketed during 2022, and a number of factors such as interest rate rises, the Ukraine war and fears of recession will make it difficult for market participants to predict developments in the coming years. Citigroup compares the current energy situation with that which took place during the crisis in the 1970s, and warns of a potential oil price collapse.
“Historical data tells us that oil prices fall roughly to production costs during a recession,” Citi analysts wrote in a July 5 report.
The bank concludes that a barrel of crude oil could collapse to $ 65 per barrel. barrels by the end of 2022 and to $ 45 by the end of 2023, should a recession occur, according to Bloomberg. This forecast assumes that the OPEC + countries will not reduce investments and production in oil, so that the supply side will weaken correspondingly.
At the time of writing, a barrel of Brent oil is trading at $ 113.