Crude oil came under renewed pressure Tuesday as Iran and six world powers announced they had reached a deal on Tehran’s nuclear program. But Citigroup’s head of commodities research played down the impact of Iran’s potential return to the oil market, saying traders shouldn’t expect much net price movement in crude futures.
“In six months we think we’ll be at exactly the same level we’re at now. It’ll maybe go up a bit in the third quarter,” Edward Morse told CNBC’s “Squawk Box.” U.S. benchmark West Texas Intermediate crude was trading at about $53 Tuesday, while international Brent priced near $58.50.
“How far down could it go? We’ll repeat what we’ve said before. If nothing gives, production will have to be shut in through the price mechanism, and it will take $40 or lower WTI to get to that level,” Morse said.