Citi Research said it was bearish on December 2022 ICE Brent futures and expects the trend of quarterly global stock draws to flip to inventory builds as soon as the second quarter of this year.

“In fact, our view is for a tight crude oil market to shift to surplus outright and in terms of days of demand cover,” Citi analysts said, adding they expect the inventory builds to sustain for the next 15-18 months.

The December Brent contract is trading at about $83.55 and Citi analysts predict it will fall by up to 20%, or roughly $16 a barrel.

Citi said firm oil prices for the January-March quarter, would most likely “represent the cyclical peak for energy markets.”

Benchmark Brent crude LCOc1 futures are headed for their seventh straight weekly gain, rising back above $90 a barrel. O/R
Source: Reuters (Reporting by Swati Verma in Bengaluru. Editing by Gerry Doyle)