A note from Citigroup commodity analysts via CNBC (gated).
Analysts at the bank say Oil prices may head toward $100 “for a short while”, citing output cuts and geopolitical tensions. But that level is not sustainable and the price is likely to drop into the end of the year:
- “The Saudi appetite to withhold oil from market, supported by Russia maintaining a certain level of export constraint, points to higher prices in the short term, all else equal, but $90 prices look unsustainable given faster supply growth than demand growth ex-Saudi/Russia,”
- “Higher prices in the near term could make for more downside for prices next year,”
- production is rising among non-OPEC+ members like the US, Brazil, Canada, and Guyana. Even Venezuelan and Iranian exports have grown.
Forecasts:
- see oil averaging $84 in Q4 2023
- see it in the low-$70 range in 2024