Oil as Low as $20 Seen by Citigroup as Oversupply Builds

Oil may drop more than 50 percent to “the $20 range” by the start of the second quarter as oversupply fills storage tanks close to capacity, Citigroup Inc. said.

Signs of a slowdown in U.S. drilling don’t mean the crude glut will be eliminated, Edward Morse, Citigroup’s global head of commodity research, said in a report e-mailed Monday. Recent gains in oil, following a seven-month decline to the lowest price since 2009, appear “more like a head-fake than a sustainable turning point,” he said.