(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.
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.
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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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