Citi bullish on oil, sees Brent rising 28% to $78 within 3 months

Forget the trade war and global growth pessimism. Citigroup Inc. is sticking to its target of Brent oil rising to $78 a barrel in three months.

Supply risks, rising demand over the northern summer, light fund positioning and a tight physical market are some of the reasons cited by the bank for its optimism in a note by analysts including Ed Morse, global head of commodities research. Citi’s forecast implies a 28 per cent increase from current levels.

“Underpinned by rising trade tensions, the global economic picture has clearly deteriorated since May,” Morse wrote in the note released Tuesday. “Yet this macro pessimism masks tangible bullish oil market fundamentals.”