Citigroup: Oil prices will continue to experience severe volatility, pending clarity on a US-Iran agreement

Odaily Planet Daily News: Max Layton, Citigroup's global head of commodities research, stated that oil prices will continue to fluctuate violently until the issue of whether an agreement can be reached between Iran and Trump becomes clear. "It's very difficult to predict whether Iran will reach a deal. In this environment where you simply don't know if an agreement will be reached, the market is inevitably driven by news headlines and will experience sharp volatility." Crude oil fell for the third consecutive day on Thursday. Layton said the sell-off was partly due to "the market's hope that the two sides could initiate agreement negotiations."

However, pressure in the physical crude oil market in the Middle East persists. According to traders, loading delays at a key crude oil terminal in Oman, located just outside the Strait of Hormuz, occurred in April, disrupting shipping schedules and potentially delaying deliveries to buyers. Layton noted that over the past 12 months, the global physical crude oil market has accumulated a "significant buffer stock" of approximately 700 to 800 million barrels. "We are consuming these inventories quite rapidly," he said, but the impact will "manifest gradually over a longer period." He added that before truly lowering his oil price forecasts, he needs to see whether Iran is genuinely ready to reach an agreement with the United States.

Last month, after the second round of US-Iran peace talks failed to take place, Citigroup raised its Brent crude oil benchmark price forecast by $15 to $110 per barrel and pushed back the baseline timeline for the reopening of the Strait of Hormuz from mid-to-late April to the end of May. (Jin Shi)