Citi: Oil could plunge to $20, and this might be 'the end of OPEC'

11/02/2015

Everyone thinks it: the current oil price is unlikely to stay. But according to Citigroup, it’s going to fall again before it rises. Oversupply, caused by record levels of pumping in Brazil and Russia, while Saudi Arabia, Iran and Iraq have cut prices to Asia to retain market share are contributing to the glut. And, forecasts Citi, a fall in production is not expected until the third quarter. Meanwhile, the complaints of carrier customers who are not seeing cheaper transport are growing ever louder.

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Ed Kerwin
February 11, 2015 at 7:38 pm
The article really highlights the point that the forecasters are at a loss on what the future looks like. An AP article today claimed that the forecasters are calling for oil prices will be anywhere from $20 to $108 per barrel. From this perspective it is understandable that shippers are frustrated by the current lack of impact on pricing. However, if manufacturers were faced with the prospect of such a wide variation in the potential cost of one of their key components, what would they do?

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