Citi Says Oil’s Rally Should Fizzle on Supply From Outside OPEC+

(Bloomberg) -- Oil prices should ease as a result of an increase in supply from countries other than OPEC+ leaders Saudi Arabia and Russia, Citigroup Inc. said.

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While technical traders and geopolitical risks may push prices over $100 for a short period, the extra supplies mean that “$90 prices look unsustainable,” analysts, including Ed Morse, wrote in a note. That should, in turn, reduce the price of key fuels such as gasoline and diesel.

Brent crude climbed toward $95 a barrel Monday as production cuts led by Saudi Arabia and Russia helped drain inventories at a time when global consumption has held firm. Premiums for physical barrels have also surged as refineries try to make the most of robust margins.

Supply from outside the Organization of Petroleum Exporting Countries should increase by 1.8 million barrels a day this year and another 1 million barrels a day next year, Citi said. That includes boosts from Canada, Brazil, Argentina, Guyana and Norway.

The US is likely to add 900,000 barrels a day this year and another 400,000 barrels a day next year.

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