Citi analyst questions sustainability of $90 per barrel oil prices
Citi analyst Ed Morse believes that while oil prices may briefly reach $100 per barrel due to output cuts and geopolitical tensions, they are likely to retreat by the end of the year. Morse points to faster supply growth compared to demand growth outside of Saudi Arabia and Russia, suggesting that $90 prices are unsustainable. Citi's analysts predict oil to average $84 in Q4 2023 and drop to the low-$70 range in 2024, citing growing production among non-OPEC+ members and the potential for Saudi Arabia to reverse cuts if markets become too tight. The recent rally in oil prices has raised concerns about higher fuel costs impacting airlines and the broader economy, particularly as the Federal Reserve aims to curb inflation through interest rate hikes.