Analysts at Citigroup noted that the “outlook for crude oil remains very binary,” adding that the Ukraine situation makes a negative bet too risky for now.

Key quotes

“De-escalation (in Ukraine crisis) could mean subsiding of prices.”

“Further flashpoints could maintain a geopolitical risk premium in oil markets for a longer period.”

“While our market outlook remains out-of-consensus and we continue to project significant downside for crude oil prices in a six-to-nine-month context, the timing of this was negatively impacted from the escalating Russia-Ukraine conflict, widening supply risk premiums, and upward price momentum for the crude oil futures strip.”

“With the potential for spot oil prices to clear $125 per barrel in the short-term, we step aside.”

“Over the next month, there will probably be a better opportunity to either tactically or thematically short the energy market again.”