Brent crude prices surged to $111.70 as Citi analysts shifted to a bullish stance, highlighting that Gulf export recovery is offset by rising logistical costs and delivery challenges.
Citi has shifted its outlook on Brent crude to a more bullish stance, moving away from its previous forecast of $60-$65 per barrel. The bank identifies a critical disconnect between the recovery of Middle Eastern crude exports and the logistical challenges of transporting this supply to buyers at a reasonable cost, which creates significant upside price pressure.
Citi shifted to a more bullish stance because logistical challenges in transporting crude from the Gulf are keeping prices high, despite the recovery in export volumes.
Brent December futures recently traded at $111.70, reflecting a 2.65% increase.
Brent crude futures climbed 2.65% to $111.70 on Thursday as Citi revised its outlook, citing persistent logistical hurdles in the Gulf. Despite a recovery in regional crude exports, the bank warns that high transportation costs and supply chain complexities create significant upside risk for oil prices.
Citi notes that while crude export volumes from the Gulf are recovering, the cost and logistical complexity of delivering that oil to buyers remain elevated, creating upside price pressure.