Oil could drop to $60 per barrel this year, strategist says

00:00 Speaker A

Oil prices were small changed connected Monday, arsenic investors weighed an uncertain commercialized backdrop betwixt the US and China, on with an upcoming OPEC Plus meeting. Here to sermon what's adjacent successful the adjacent word for oil. We've got Eric Lee, Citi's Global Energy Strategist. Eric, large to person you successful workplace with us. So I cognize that a small spot much agelong term, you bash expect determination to perchance beryllium a rebound, but successful the abbreviated term, however overmuch much bearishness are you anticipating?

00:35 Eric Lee

Yeah, sure. Thank you. I mean, we proceed to person a presumption wherever we could spot $60 Brent again successful the coming abbreviated word this quarter, but perchance besides done to the extremity of the year. So our outlook, you know, for the remainder of the twelvemonth connected mean is determination astir 60, $62, the debased 60s. So we proceed to spot the broader bearish sentiment proceed to play out, and there's a batch of things that we proceed to request to spot play out. You know, what are the effects of the tariffs going to be, however does that filter done to lipid demand, and past also, what volition OPEC Plus do? Are they going to support bringing lipid backmost on, and they're bringing rather a spot connected successful May.

01:30 Speaker A

And however are you reasoning astir argumentation successful the midst of this, peculiarly fixed the Trump administration's involvement successful keeping the terms of lipid low, to what grade does that pass your view?

01:44 Eric Lee

Yeah, that's that's a precise halfway portion of our view. So erstwhile we deliberation astir immoderate of the halfway interests of the administration, 1 of them we deliberation is getting lipid prices down with the content that this volition get vigor costs down and ostentation down, and past possibly adjacent involvement rates. Now the walk done whitethorn not beryllium that simple, but we bash judge that they judge that, and truthful we bash deliberation that that's an important consideration, and it does mean it mightiness impact however they bash geopolitical woody making with Russia, Ukraine, Iran, Venezuela, but besides conscionable broader policy. Are they going to effort to enactment the U.S. lipid and state assemblage to effort to incrementally assistance accumulation beryllium higher than it different would be?

02:49 Speaker A

Sure. Yeah, and I privation to gully retired this transportation a small spot much betwixt the terms of lipid and the system due to the fact that from wherever I beryllium arsenic a hazard manager, reasoning astir however it affects our portfolios, my caput ever goes backmost to economical growth, right? So erstwhile you're looking astatine the terms of Brent oil, is determination a terms level oregon a definite awesome that would marque you say, ah, you know, we're seeing we're seeing little request truly commencement to measurement connected lipid prices close now.

03:23 Eric Lee

Yeah, sure. I mean, it's ever going to beryllium truthful galore factors astatine once, particularly successful this existent market, but request is truthful core, and I deliberation that's what drove the large sell-off station April 2nd, right? The information that we were going to spot beauteous large tariffs and that they mightiness beryllium rather sticky. That drove Brent from what had been astir $75 successful the days conscionable earlier that to wherever we are now, 66-ish, right? And we've of people past 2 weeks, we saw similar $59 oil. So that successful immoderate consciousness has already happened, but there's much that tin come. If you bash get recessions, prices tin autumn little and they they and they find enactment astatine immoderate consciousness of wherever marginal costs tin be.