Citi Wealth Insights

Recent slowdown in the global growth outlook, economic divergence and associated slowdown in trade has undermined demand for commodities.

The WTI declined 27% in the past six weeks to $55.50, back to the $40-$60 range that existed for most of 2015-17.

The petroleum complex was down 5-10% in October due to a wide variety of factors, largely seasonal, but consistent with the drop in global equities.

While Citi’s Brent crude price forecast remains at $79 per barrel for Q4 2018, recent price trends warrant an assessment of what the risk of sustained higher oil prices mean for Asia.

Oil supply risk in a number of countries raise concerns about a price spike.

Citi remains moderately bullish on Commodities for the second half of 2018.