Citi analyst: No more $100 Oil?

22 September,, Lagos – Some weeks ago Crude oil price has been rising, after the price hit the low around $38. Over recently, crude oil jumped 4%, bouncing back on falling U.S. rig count. Oil prices has moved higher on Monday, following a report from OPEC where it was forecast that the price of crude oil will move back to $80 per barrel in year 2020.

This week, the market is coming alive after erasing most of their losses from Friday’s massive sell-off. Technically, crude oil price is fluctuating near the 80 EMA lines. Such a technical formation is keeping the chance for a resumption in the overall bullish trend, with candles targeting much higher level the 49.00 resistance level.

No more $100 Oil per barrel in future?

Crude oil now looks set to recover from the recent lows hit. Even so, it will take a lot for oil prices to trade again in the $100-per-barrel level in the near future. At least according to Mr. Ed Morse, the head of global commodity research at Citigroup.

In an interview with CNBC, Mr. Ed Morse has said: "We'd have to see a reversal in trends in global GDP growth and, more importantly, in global petroleum demand growth. We've seen the relationship between GDP growth and oil product demand widening considerably. For every 1 percent increase in global GDP, there's less of a percent increase in oil demand. That will weigh heavily on the markets."
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A further glut is expected

Another factor to consider in the long term oil prices is that as the Iranian nuclear nears a conclusion. The influx or more production from Iran into the markets will further lead to a glut, as demand is unlikely to match supply at the same pace.

Morse also added there are two key factors keeping oil prices down: "There is so much more oil that can be produced at lower prices, and the world has a big abundance of these new, unconventional oils, particularly shale oil. Also, OPEC countries have a need to produce more and they'll be producing more."

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