Brent Oil Prices Unlikely to Fall Below $70, Citigroup Predicts

Key Insights

  • Oil prices are unlikely to fall below $70 a barrel due to a number of price-supporting factors, including OPEC+’s willingness to cut production, said Citigroup’s chief natural resources analyst.
  • However, it is hardly possible to increase the price above $90 per barrel, he said.
  • Brent is currently trading at almost $80 on the stock exchange.

World oil prices are unlikely to fall below $70 a barrel, but it is also unlikely that they will rise above $90 a barrel, Ed Morse, head of global commodity research at Citigroup, told Bloomberg TV.

Oil prices are supported by several factors. One of them is Russia and OPEC, which do not want oil to cost less than $70 a barrel and have shown a willingness to make decisions to prevent this, Morse said.

In addition, $70 per barrel will suit the US, which intends to replenish its strategic reserves at such a price – this will create demand and prevent the price from falling, the expert believes.

Finally, there are China’s reserves, which also want to buy oil when the price is low and spend the reserves when it’s high.

Will the price of oil rise above $90?

At the same time, taking into account the shortage of supply, the price of oil is unlikely to rise above $90 per barrel, Morse believes.

Only extreme weather events can change the situation: for example, hurricanes off the US oil coast, he said.

Restrictions on investment in fossil energy resources and a decrease in demand for it increase market volatility, the expert believes.

The oil market will fluctuate between fuel shortage and fuel surplus: the surplus will not be enough to drive prices down to $20 per barrel, let alone negative values, but the fuel shortage will not be so severe as to push prices up to $100 per barrel, Morse concluded.

Futures for Brent oil as of the time of writing rose by 1.6% to $79.8 per barrel.

Fluctuations in the oil market: outlook and implications

Last week, the price of Brent exceeded $80 per barrel for the first time since the end of April. Oil rose after Russia announced it would cut its crude exports by 500,000 bpd in August and Saudi Arabia announced its intention to extend a voluntary cut of 1 million bpd for a month.

In June, Russia, Saudi Arabia and other OPEC+ countries agreed to extend restrictions on oil production: in 2024, the total level of production by OPEC+ countries will be 40.46 million barrels per day, 1.4 million barrels less than now.

Given these decisions, Russia may become the leader in oil production in OPEC + instead of Saudi Arabia, wrote The Wall Street Journal, citing the International Energy Agency.

Samson Ononeme

Meet Samson Ononeme, a dynamic writer, editor, and CEO of With a passion for words and a sharp business acumen, Samson captivates readers with captivating storytelling and delivers insightful market analysis. He is a trailblazer in the finance industry, empowering individuals with knowledge and shaping the narrative of money. Get ready to be inspired by his literary prowess and entrepreneurial leadership.

2 thoughts on “Brent Oil Prices Unlikely to Fall Below $70, Citigroup Predicts”

Leave a Reply