Citi Again Doubts Supercycle Thesis in Oil and Other Commodities — OPIS

By Tom Kloza

Notably absent in the Goldman Sachs’ research report Sunday downgrading Brent price projections was any mention of a commodity supercycle, but rival investment house Citigroup Inc. referenced the notion in a Monday report reminding investors that odds of such an event “continue to fade.”

Citi reiterated what it characterizes as a “neutral-bearish” outlook Monday morning, stressing that it expected modest rallies in precious metals, battery metals and copper but remained skeptical about OPEC+ efforts to shore up global oil prices.

The bank did cite “dizzying volatility” for crude prices of late with the performance tied to some media reports of progress in U.S.-Iran nuclear negotiations. Citi suggested that any breakthrough that would allow Iran to export more crude would occur only after the 2024 U.S. presidential elections but acknowledged that the news weighed on investor sentiment.

A Citi analysis of money flow finds that investors are still largely unbiased toward long positions in both ICE Brent and NYMEX West Texas Intermediate crude. Positioning in Brent finds a long bias of just 3.9 to 1, which compares to a five-year average of 5.3 to 1. Length in WTI is at a modest 2.3 to 1, or afraction of the five-year average bias of 7.4 to 1.

Citi maintains its price deck, which calls for a third-quarter price of $83/bbl for Brent before the benchmark drops to $79/bbl for the last quarter.

–Write to Tom Kloza at

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