Citigroup said in a report Wednesday that it was bullish on the outlook for commodities for the remainder of the year, while the bank also expected crude oil and metal prices to rise further.
Citi report shows that since the beginning of the third quarter of this year, the commodity market to play a power, and will be the remaining time in 2017 has been outstanding performance, especially in view of the investment funds have more power into the market. “The bank said raw materials will rise in the quarter ending next week, which is mainly due to the higher prices of metals, including aluminum,” Citi added, “this quarter, due to China’s growth is more balanced, the yuan stronger, As well as the implementation of environmental and safety policies, strong promotion of metal and commodity markets. ”
The bank said, “Overall, we expect strong performance will continue until the end of the year, if the oil as a whole instead of substituting, may be expected to join the Chinese-related commodities and rare metals strong momentum.” Citi said, after a turbulent summer , Crude oil should be higher at the end of this year.
Citigroup has been bullish on commodities this year, the bank said in July last year, with the global economic slow recovery, investors will be more cash into the fund, which is conducive to commodity factors. In addition, the bank also said last month, as China to promote the supply side of the reform, metal, iron and other global markets tight.
Crude oil market, Citigroup said that due to crude oil inventories may decline, the spot market may tighten. “The fundamentals of supply and demand continue to be in line with our constructive expectations, and crude oil inventories have declined at a rate of about 100 million barrels per day during the summer season, and the momentum is expected to continue for the full year of 2017,” the bank said.
At the same time, Citi is still in the near future to maintain the neutral to bullish view of crude oil. The bank is expected to Brent crude oil in the fourth quarter of this year is expected to be 58 US dollars a barrel, 2018 is estimated at $ 54 a barrel, in addition to the estimated 2018 US WTI crude oil at $ 50 a barrel.
Brent crude futures closed up 2% to $ 56.29 a barrel on Wednesday, while US WTI crude futures closed up 1.9% to $ 50.41 a barrel. Oil prices will rise nearly 16% this season, will be the best performance in 2004 to the third quarter, after the Iraqi oil ministers implied the Organization of Petroleum Exporting Countries (OPEC) and other oil-producing countries to consider to extend production or even increase the intensity of production.