Oil at $90 a barrel looks ‘unsustainable,’ says Citi analyst

Oil prices may head toward $100 "for a short while" amid output cuts and geopolitical tensions, but they’ll likely retreat by year-end, says one Wall Street analyst. "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," Citi’s global head of commodity research Ed Morse and his team wrote to investors. "Higher prices in the near term could make for more downside for prices next year," he added. Crude has been on an upward trend over the past three months. West Texas Intermediate ( CL=F ) has risen by about $23 per barrel since late June to above $91 on Monday. Brent crude futures ( BZ=F ) have seen a similar rise of more than 30% over the same period, currently hovering above $94 per barrel. Citi’s analysts see oil averaging $84 in the fourth quarter 2023 and moving to the low-$70 range in 2024. Morse writes production is growing among non-OPEC+ members like the US, Brazil, Canada, and Guyana. Even Venezuelan and Iranian exports have grown. […]

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