Crude oil prices could head toward $100 a barrel for a short while, but are expected to retreat by the end of this year, according to Citi’s global head of commodity research Ed Morse and his team amid output cuts from Saudi Arabia and Russia as well as geopolitical tensions.
The analyst stated that oil prices at $90 look unsustainable given faster supply growth than demand growth excluding Saudi and Russia.
He also noted that higher prices in the near term could create more downside for oil prices next year.
Last week, the analyst from the Bank of America noted that oil prices could soon spike beyond past $100 a barrel before 2024 should top oil producers in OPEC continue to cut supply off the global market.
Surge in oil prices came after Saudi Arabia and Russia announced to extend their voluntary production cuts to the end of this year. Earlier this month, OPEC’s largest oil producer Saudi Arabia announced that it would extend the decision for an output cut by one million barrels per day to the end of this year. Meanwhile, Russia also announced to extend the 300,000 a barrel per day cut until the end of December as well.
On Monday, the international benchmark Brent crude rose 0.43% to $94.84 per barrel, while the West Texas Intermediate increased 1.01% to $92.40 a barrel.
