A big bank made a big call Tuesday on the price direction of crude oil, and market participants are acting on it in a big way in the trading session.
The Call: On Tuesday morning, Citigroup issued a dire warning to owners of crude oil futures and related products, which also has negative implications for issues in the oil patch.
Citigroup warned that crude oil could decline to $65/barrel by year-end and $45/barrel by the end of 2023 if the U.S. economy slips into a recession.
PreMarket Prep's Take: On Tuesday’s show, the co-hosts discussed the prediction against the backdrop of other analyst calls for crude oil to rally anywhere from $150-$350.
Needless to say, both co-hosts are heavily favoring the Citigroup prediction.
“The Citigroup analyst has it right: the price of oil will come down if the economy goes into a recession,” said Dennis Dick.
The author of this article noted that demand is already tapering off due to the prices at the pump.
The discussion on crude oil from Tuesday’s "PreMarket Prep" show can be found here:
Crude Oil Crushed: Following choppy and volatile price action last week that left crude oil modestly in the green, it is collapsing in Tuesday’s session. Keep in mind the current price action is even more negative than what the net change is showing.
The reason: at one point it was higher by nearly $3 when it peaked in premarket trading at $111.45 and at its low was over $10 in the red.
As of 12:45 p.m. EST, the August contract is lower by $9.80 or 9% at $98.63.
