Citi predicts oil prices will fall sharply this year

 Oil prices could slump to $65

Goldman Sachs reckons crude oil prices are going to $140 in the coming months. JPMorgan said they could even surge to $380 in a worst-case scenario. UBS reckons they’ll hit $130 in September. But Citi is bucking the trend. The investment bank’s strategists predict oil will fall sharply by the end of the year, from prices of around $100 a barrel on Friday.

Francesco Martoccia, the bank’s head of European commodities strategy, warned in note to clients Tuesday that oil prices could even slump to $65 a barrel by December, if a nasty recession hits. The same day, oil prices tumbled, with US benchmark WTI crude dropping below $100, as investors worried that central banks’ interest-rate hikes would trigger sharp slowdowns in economic growth.

Yet Martoccia and his colleagues expect oil to drop even if there’s no drastic slowdown. Their so-called base case is that the price of global benchmark Brent crude tumbles to $85 a barrel by the end of the year — that’s around 18% lower than Friday’s price of $104. At the heart of Citi’s contrarian view is its expectation that Russia will keep exporting and producing crude, even as the US and its allies batter the country with sanctions.

Many analysts expect Russian energy exports to fall sharply by the end of the year as the European Union gradually bans purchases from the country. The G7 is also exploring how to cap Russian oil prices — which could cause exports to drop further. The logic is simple. Unable to sell its oil, Russia will shut down production. Buyers will then be competing for the remaining global supplies, driving up oil prices.

https://finance.yahoo.com/

BREXIT: The UK is heading for a decade of Italy-style decline

The Resolution Foundation warned that exports to Europe have seen a major decline since Britain’s exit from the EU

Britain’s economy is on course to deteriorate to the level of deeply-struggling Italy over the next decade if it is unable to overcome the hit taken by challenges, including Brexit, according to a new report.
The Resolution Foundation, an economics think-tank, and the London School of Economics said in a report on Tuesday that Britain faced a long decade of decline and underperformance due to its departure from the EU, as well as the impact of the COVID-19 pandemic, automation, and the expensive challenge of making the economy less reliant on fossil fuels.

“The UK now faces a decisive decade, as the aftermath of Covid-19, Brexit and the net zero transition come together with major shifts in technology and demography. This matters far more than economics. Failing to rise to this challenge risks leaving the nation diminished and divided,” the report said.

https://www.businessinsider.fr/