Oil Could End up at $20 Says Citi

U.S. oil prices of around $20 per barrel could still happen, Citigroup’s Ed Morse, said Thursday as crude briefly hit 12-year lows of just over $32 per barrel.

“You never know where the bottom is,” Morse told CNBC’s “Squawk Box.” He said the recent tumble has been more severe than he’d anticipated. “We think the pressure is still going to be on for lower prices,” he added.

West Texas Intermediate crude was falling around 3 percent early Thursday, after a decline of 5.5 percent on Wednesday.

China’s stock rout this week sparked new concerns about a slowdown in the world’s second-largest economy and what that might mean for global oil demand at a time of near-record production and massive crude stockpiles.

“The market is itself much more fragile than the price of oil would indicate,” said Morse, Citi’s global head of commodities research. He added that any supply disruptions due to political uncertainty in Venezuela, Nigeria or Iraq, for example, could just as easily send oil prices higher.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza