Oil has traded below $70 for large periods of the last five years. The Citigroup prediction is useless, but that's because such public predictions by large financial institutions are always useless (they aren't going to release valuable information for free), not because of the % drop. Implying that oil can't possibly drop 33% is even more stupid. Anything can happen as far as markets go. You're probably someone who reckoned in December that it was "ridiculous" to think that SPX would trade below 4000 in 2022.
SPX was always destined to dip below 4000 because of how much of a bubble big tech was. As I said to a lot of people at the time, Microsoft was the only one close to real value, followed by Apple. Interestingly, both had their weights in the index upgraded lately. Amazon, Tesla, Facebook are all hideously overvalued and I don't talk about Google because I hate them too much to be impartial.
As for oil, it has traded below $70 when times are good, you can go back to a time where the future price was actually negative after the pandemic too.
I don't see how the price can fall when the demand is solid and the supply isn't rising. People aren't going to suddenly decide they don't need oil, no matter how much Citigroup wishes they could rush to their green catastrophe.
It's not just big tech that's in a bubble; but that's another topic.
I don't see how the price can fall when the demand is solid and the supply isn't rising.
In December 2019, you probably wouldn't have predicted a massive fall in demand in early 2020 but it happened. I'm not saying it will happen again, I'm saying you can't be sure it won't. Their "green catastrophe" is also better served by oil being expensive, not cheap.
Oil has traded below $70 for large periods of the last five years. The Citigroup prediction is useless, but that's because such public predictions by large financial institutions are always useless (they aren't going to release valuable information for free), not because of the % drop. Implying that oil can't possibly drop 33% is even more stupid. Anything can happen as far as markets go. You're probably someone who reckoned in December that it was "ridiculous" to think that SPX would trade below 4000 in 2022.
SPX was always destined to dip below 4000 because of how much of a bubble big tech was. As I said to a lot of people at the time, Microsoft was the only one close to real value, followed by Apple. Interestingly, both had their weights in the index upgraded lately. Amazon, Tesla, Facebook are all hideously overvalued and I don't talk about Google because I hate them too much to be impartial.
As for oil, it has traded below $70 when times are good, you can go back to a time where the future price was actually negative after the pandemic too.
I don't see how the price can fall when the demand is solid and the supply isn't rising. People aren't going to suddenly decide they don't need oil, no matter how much Citigroup wishes they could rush to their green catastrophe.
It's not just big tech that's in a bubble; but that's another topic.
In December 2019, you probably wouldn't have predicted a massive fall in demand in early 2020 but it happened. I'm not saying it will happen again, I'm saying you can't be sure it won't. Their "green catastrophe" is also better served by oil being expensive, not cheap.
Have oil majors paid down their 2020 debts yet? Can they handle another crash in oil?
The green agenda is best served by oil companies going to the wall.