Citigroup: Oil prices will continue to fluctuate wildly, awaiting clarity on the US-Iran agreement.

Max Layton, global head of commodities research at Citigroup, said oil prices will continue to fluctuate wildly until the question of whether Iran and Trump can reach an agreement becomes clear. “It’s difficult to predict whether Iran will reach an agreement, and in this environment where you simply don’t know whether an agreement will be reached, the market is bound to be news-driven and experience wild volatility.” Crude oil fell for the third consecutive trading day on Thursday, with Layton saying the decline was partly due to “the market’s hope that the two sides can begin negotiations.” However, pressure remains in the Middle East physical crude oil market. Traders said that loading delays at a key crude oil loading terminal in Oman, outside the Strait of Hormuz, in April disrupted shipping plans and could delay deliveries to buyers. Layton said the global physical crude oil market has accumulated a “considerable buffer” of about 700 to 800 million barrels over the past 12 months, and “we are rapidly depleting these inventories,” he said, but the impact will “gradually materialize over a longer period.” He added that he needs to see if Iran is ready to seriously reach an agreement with the United States before truly lowering his oil price forecast. 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 postponed its benchmark expectation for the reopening of the Strait of Hormuz from mid-to-late April to the end of May. (Jinshi)