Oil in $20s a Risk as Citigroup Sees Crude Storage Tanks Fill Up
- WTI may slump further if storage runs out; supply cuts needed
- Brent may decline to $30 if ships are needed to store oil
Will Oil Recover in 2016?
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U.S. oil prices may fall into the $20s if tanks used to store crude start to fill up before producers sufficiently curb output, Citigroup Inc. predicted.
Prices would need to fall low enough to force some production to be halted if supplies overwhelm storage capacity, a scenario that looks set to be tested in the first half of next year, the bank said in a report. That would require West Texas Intermediate crude, the American benchmark, to slump “to the high $20s” from about $37 currently, the bank said. Brent, the global marker, would need to decline to about $30.