Oil prices may be tanking in the wake of a failed attempt to freeze production, but Citi is betting on a recovery in prices.
Citi is forecasting declining supply from some producers, such as Venezuela and Nigeria, while inventories may finally see some drawdowns.
The bank now expects Brent and WTI prices at $39 and $38 a barrel respectively in the second quarter, up from forecasts of $31 for each. For the third quarter, Citi now forecasts Brent at $46 a barrel and WTI at $45, up from its previous forecasts of $41 and $40, respectively. For the fourth quarter, it held its forecasts steady at $52 a barrel for Brent and $50 for WTI.
That's despite the failure of a summit in Doha between the world's largest oil-producing countries to reach a deal on Sunday to freeze output in an effort to boost crude prices which have tumbled from levels well over $100 a barrel in mid-2014 amid a global supply glut.