As the demand from refineries rises in November and December, Citigroup sees oil prices around $90 or even $100 if further disruptions worsen a supply crunch amid rising consumption.
Citi’s Global Head of Commodities Research, Ed Morse, said that an average price of $80/bbl for this quarter is “realistic.
According to Bloomberg, Benchmark Brent crude topped $85/bbl early last month due to U.S. sanctions on Iran although prices have dropped back.
OPEC’s activities are some of the reasons for the possible hike in oil prices. Russia is suggesting it could push output to a record. Supply disruptions can also be expected elsewhere, including in OPEC nations Nigeria due to upcoming elections. Disruptions are also imminent in Libya and Venezuela.
In a similar development, President Donald Trump has last week said he does not want to drive oil prices up to $100/bbl or $150/l, the reason his administration decided to extend waivers this week to eight countries to continue to import Iranian oil in spite of new U.S sanctions.
Trump said that the global economy was fragile and he would not want to worsen matters.