Citibank: If geopolitical risks intensify, it is expected that oil prices may rise to $70 per barrel.

Citibank released a research report stating that although the market expected a large oversupply of crude oil at the beginning of the year, oil prices may continue to remain higher than many people's expectations. It also pointed out that recent events cannot fully explain the strength of prices. The report mentioned that Brent crude is currently hovering around $68 per barrel, much higher than the expected price of around $50 per barrel in an oversupply environment. Citibank has long forecasted that oil prices will average around $60 per barrel this year. Production disruptions in Kazakhstan, severe weather in the US, geopolitical tensions in the Middle East, and tightening restrictions on the purchase of Russian oil by the US have collectively pushed prices above $60 per barrel. As the weather in the US warms and production in Kazakhstan's Tengiz oil field resumes, oil prices may ease, and the spread between Brent and Dubai crude prices is expected to narrow (Brent weakening, Dubai strengthening). However, if geopolitical tensions escalate further, oil prices could be pushed up to the bank's target range of $70 per barrel in the next 0 to 3 months. Meanwhile, global and US oil inventory data show that crude oil inventories are decreasing while refined product inventories are increasing. This is mainly due to the winter storm "Uri" hitting most parts of the US, affecting data in recent weeks. As heating demand rises, the severe weather may exacerbate diesel supply shortages, while refining activities are impacted by shutdowns and frozen operations, affecting US oil production and possibly affecting oil trade along the Gulf Coast.