Citi Raises 1Q Crude Oil Price Estimates

SEATTLE (Oil Monster):  The upward momentum in crude oil prices at the start of the year has prompted analysts at Citi Research to raise their first-quarter estimate for benchmark crudes, while they remain bearish for the remainder of 2025.

"Oil markets have rallied on potentially larger geopolitical impacts on Iran's oil exports, and cold weather boosting heating demand and hitting U.S. oil supply," Citi said Thursday in a report.

Citi revised its average estimate for international benchmark Brent to $71 a barrel in the first quarter from $65 previously, "as Chinese buyers have pulled back more than expected on buying Iranian oil, for now," the analysts said. Further reductions could also be seen in Russian crude exports, the analysts said. Citi sees West Texas Intermediate averaging $67 a barrel in the first quarter, up from $61 previously.

The bank remains downbeat on prices for the rest of the year, however, predicting Brent will drop into the $60s from the second quarter on larger-than-usual stock builds.

Geopolitical factors "appear to be more sentiment-driven, including the possibility of potential harder U.S. sanctions on Iran, which would limit oil supply," Citi said. But the extent to which supply will be impacted, if at all, remains speculative until the Trump administration takes office, the bank added.

Courtesy: www.marketwatch.com