Citi says oil could rise further if US-Iran talks remain thorny

Oil prices could rise further if US-Iran talks remain thorny, Citi said, though inventory drawdowns, Strategic Petroleum Reserve releases, reduced Chinese imports, weaker demand and periodic signs of de-escalation have helped cushion the impact, reports Reuters.
Citi said its base case remains that disruption in the Strait of ?Hormuz eases by the end of May but said difficulty in achieving a US-Iran deal has increased near-term upside risks.
The bank maintained its zero-to-three-month Brent price forecast at $120 a barrel. It expects Brent to average $110 a barrel in the second quarter, before easing to $95 in the third quarter and $80 in the fourth quarter.
China's possible cut of about 2.4 million barrels per day in oil imports in April and May, to around 9.2 million bpd from a 2025 average of about 11.6 million bpd, has also reduced stress on the global oil market, Citi said, citing ship tracking data.
However, Citi said "We continue to believe that oil markets are under-pricing duration and tail risks."