Citi sees firm 2017 show in commodities

Citigroup Inc has given a clarion call for commodity bulls, predicting that most raw materials are expected to perform strongly next year as global economic growth picks up, the oversupply that's dogged markets finally dissipates and investors plow in more funds.

The bank is bullish on oil, copper, zinc, and wheat in a six- to 12-month horizon, with global growth seen at 2.7 percent from 2.5 percent in 2016, according to an emailed report. It's bearish on coal and iron ore - describing this year's outperformance in bulks as a fluke - and gold and soybeans.

Commodities have made a comeback this year after sinking to a quarter-century low in January. The oil market shows signs of rebalancing after a glut, and base metals are rallying on prospects for rising demand. Citigroup has flagged its optimism about raw materials in 2017 since at least July, and other banks have also turned more positive. Last month, Goldman Sachs Group Inc recommended an overweight position for the first time in four years.