Citi raised its third-quarter 2026 Brent forecast to $86 per barrel in a research note published on September 3, while leaving its 4Q26 and 2027 estimates unchanged. The bank expects a reopening of the Strait of Hormuz to push crude into a bigger surplus than existed before the conflict, and it also revised its natural gas forecasts.
Citi lifted its third-quarter 2026 Brent crude forecast to $86 per barrel, calling the move a mark-to-market adjustment rather than a shift in its longer-term view. The bank left its 4Q26 Brent forecast at $70 per barrel and its 2027 forecast at $65 per barrel unchanged.
Hormuz reopening drives the bearish 2027 view
Citi's rationale centers on the Strait of Hormuz: once the waterway reopens, the bank expects oil markets to move into an even larger surplus than existed before the conflict disrupted flows. That is Citi's own forward-looking view, not a confirmed development. It implies the bank sees current price strength as temporary, with supply normalization eventually outweighing any lingering risk premium and pushing prices lower into next year and 2027.
Natural gas forecasts diverge between the US and Europe
Citi also revised its natural gas outlook in the same note. The bank lowered its 3Q26 Henry Hub forecast to $2.90 per million British thermal units, citing expected production growth that should keep domestic supply ample. That contrasts with its stance on European gas, where it raised TTF price forecasts to €60 per megawatt hour for 3Q26 and €56 per megawatt hour for 4Q26.
Together, the revisions point to a split between Citi's short-term and longer-term oil expectations, and between its US and European gas forecasts. For oil traders, the message is that current strength may not hold once the Strait of Hormuz reopens as Citi expects. Confirmation of the reopening timeline and US gas production data are the inputs Citi flags as key to validating or challenging its revised price path.
Source: Investinglive RSS Breaking News Feed
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