{"id":18947,"date":"2023-06-06T12:40:21","date_gmt":"2023-06-06T16:40:21","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/commodities\/oil-saudi-maneuver-itself-wont-bring-80-90-a-barrel-citi\/"},"modified":"2023-06-06T12:40:22","modified_gmt":"2023-06-06T16:40:22","slug":"oil-saudi-maneuver-itself-wont-bring-80-90-a-barrel-citi","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=18947","title":{"rendered":"Oil: Saudi maneuver itself won\u2019t bring $80-$90 a barrel – Citi"},"content":{"rendered":"
\n

Investing.com — Saudi Arabia\u2019s 1-million-barrels-per-day oil cut that will reduce its output by 20% in total in July won\u2019t by itself bring a barrel to between $80 and $90, Citigroup\u2019s analysts said in an energy note issued Tuesday.<\/p>\n

\u201cIt would take surprisingly better coordinated action among OPEC+ producers to tighten markets, if that is their wish,\u201d the note said. \u201cThe likelihood that Saudi Arabia would tackle this on its own on a sustained basis is quite low.\u201d<\/p>\n

Citi\u2019s analysts added that the Saudi cut itself is \u201cunlikely to raise oil prices into high $80s\/low $90s (as) weak fundamentals point to lower prices by (the) year-end.\u201d<\/p>\n

Oil revenue is the lifeblood of the economies in OPEC, or the Organization of the Petroleum Exporting Countries, a 13-member Saudi-led group whose main objective is to be the price-setter of the commodity. Ten other oil producing states, including Russia, that aren\u2019t OPEC members have also been keeping their output closely in line with the group\u2019s for the sake of price. The 23-nation alliance is collectively known as OPEC+. Over the past eight months, OPEC+, led by Saudi Arabia has announced two production cuts totaling 3.7 million barrels per day, without much to show in prices.<\/p>\n

After another meeting of the alliance on Sunday, Saudi Arabia said the kingdom\u2019s own oil output will drop to 9M barrels per day in July, as it accounted for the additional million\u00a0barrels per day it will cut amid active summer travel and energy consumption in the Northern Hemisphere. Since October, the Saudis have already been producing 1.5M barrels below their regular average daily production of 11.5M. Their latest maneuver appeared aimed at lifting from the low $70s and global benchmark from the mid $75 levels.<\/p>\n

Citi\u2019s analysts, however, said demand \u2014 or rather the lack of it \u2014 was the real problem in the oil market and achieving commensurate balance with supply will be difficult to keep crude consistently at $80-$90 per barrel for both the first and second halves of this year, as well as in 2024.<\/p>\n

\u201cTaking into account adjustments on both the supply and demand side seen in the full supply-demand balances\u2026we see average quarterly prices fairly range-bound for the year, averaging $81 for Brent in both 1H and 2H but with the potential to range between $72 and $90,\u201d the Citi note said.<\/p>\n

\u201cIn our base case for 3Q 2023 (50% probability), we assume that the Saudi cuts of ~1-m b\/d are made only for the month of July, in which case we are looking at and expecting virtually no stock change for 1H\u201923, and a stock draw of 500-k b\/d in Q3 and a stock build in Q4 of 800-k b\/d.\u201d<\/p>\n

\u201cThe Q3 draw is lower than what is seasonally normal for summer, and the build in Q4 would reflect growing weakness on the demand side against stronger performance from non-OPEC on the supply side.\u201d<\/p>\n

Citi said a more bullish result, with a 20% probability, would come from Saudi Arabia maintaining its lower production of 9M barrels per day through the third quarter, bringing average prices to $88 based on the projected stock draw of 1.1M barrels daily for the quarter.<\/p>\n

\u201cThere are other bullish possibilities to consider as well, but we think these are lower probabilities than a longer Saudi cut,\u201d the note said. \u201cThese would include disruption risks from countries like Iran, Iraq, Libya or Nigeria, or a far more robust growth in demand than we forecast, although higher demand would almost certainly result in a shorter time frame for the Saudi cut.\u201d<\/p>\n

On the contrary, Citi assigned a higher 30% probability to its bearish case for oil, which it said would stem from more significant economic weakness that included potential recessions in the United States and Europe, and lower growth in China and world trade overall.<\/p>\n

\u201cIn our bearish case we also include more leakage from OPEC+. It is notable that Saudi Arabia alone is making cuts and none of the other members of the group volunteered to decrease output. It might be hard to find a way to keep all those with shut-in or growing capacity from putting oil in the market. Our base case for 2024 is essentially bearish.\u201d<\/p>\n

\u201cWe paint a picture of the OPEC+ countries not keeping their production cuts through next year, but to make a point about the growing spare capacity in the system, we add back all of the cuts that we can identify. We do not have Saudi Arabia or the UAE producing to anywhere near their growing capacity. Still, the result is an inventory build for the year that averages +2.1-m b\/d, given our projection of even weaker demand growth in 2024 than in 2023.\u201d<\/p>\n

Next year, Citi\u2019s analysts said, will likely see a demand growth of some 200,000 barrels per day, but more limited to petrochemical feedstock and jet fuel, due to a potential U.S. recession and an initial demand spurt of some 900,000 barrels daily in China.<\/p>\n

\u201cWhen we look at the more bullish case of OPEC+ countries maintaining their cuts for 2023 through 2024 with the exception of the incremental 200-k b\/d awarded the UAE as part of the current agreement, the overall picture looks quite bullish, with an average draw of 0.2-m b\/d on an error-term adjusted basis.\u201d<\/p>\n

\u201cYet if we add back the error term adjusted, stock builds would average 1.1-m b\/d for the year as a whole. That might imply that no matter how hard the group has worked this year to rein in output, 2024 might still remain bearish and muted.\u201d<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Investing.com — Saudi Arabia\u2019s 1-million-barrels-per-day oil cut that will reduce its output by 20% in total in July won\u2019t by itself bring a barrel to between $80 and $90, Citigroup\u2019s analysts said in an energy note issued Tuesday. \u201cIt would take surprisingly better coordinated action among OPEC+ producers to tighten markets, if that is their […]<\/p>\n","protected":false},"author":1,"featured_media":3666,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[242],"tags":[83],"class_list":["post-18947","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-commodities","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nOil: Saudi maneuver itself won\u2019t bring $80-$90 a barrel - Citi | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Investing.com -- Saudi Arabia\u2019s 1-million-barrels-per-day oil cut that will reduce its output by 20% in total in July won\u2019t by itself bring a barrel to\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=18947\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Oil: Saudi maneuver itself won\u2019t bring $80-$90 a barrel - Citi | iFintechWorld\" \/>\n<meta property=\"og:description\" content=\"Investing.com -- Saudi Arabia\u2019s 1-million-barrels-per-day oil cut that will reduce its output by 20% in total in July won\u2019t by itself bring a barrel to\" \/>\n<meta property=\"og:url\" content=\"https:\/\/ifintechworld.com\/?p=18947\" \/>\n<meta property=\"og:site_name\" content=\"iFintechWorld\" \/>\n<meta property=\"article:published_time\" content=\"2023-06-06T16:40:21+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-06-06T16:40:22+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/05\/LYNXNPEBA20ZO_L.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"533\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"News Room\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"News Room\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/ifintechworld.com\/?p=18947#article\",\"isPartOf\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=18947\"},\"author\":{\"name\":\"News Room\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61\"},\"headline\":\"Oil: Saudi maneuver itself won\u2019t bring $80-$90 a barrel – Citi\",\"datePublished\":\"2023-06-06T16:40:21+00:00\",\"dateModified\":\"2023-06-06T16:40:22+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=18947\"},\"wordCount\":940,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/ifintechworld.com\/#organization\"},\"keywords\":[\"Featured\"],\"articleSection\":[\"Commodities\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/ifintechworld.com\/?p=18947#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/ifintechworld.com\/?p=18947\",\"url\":\"https:\/\/ifintechworld.com\/?p=18947\",\"name\":\"Oil: Saudi maneuver itself won\u2019t bring $80-$90 a barrel - Citi | iFintechWorld\",\"isPartOf\":{\"@id\":\"https:\/\/ifintechworld.com\/#website\"},\"datePublished\":\"2023-06-06T16:40:21+00:00\",\"dateModified\":\"2023-06-06T16:40:22+00:00\",\"description\":\"Investing.com -- Saudi Arabia\u2019s 1-million-barrels-per-day oil cut that will reduce its output by 20% in total in July won\u2019t by itself bring a barrel to\",\"breadcrumb\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=18947#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/ifintechworld.com\/?p=18947\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/ifintechworld.com\/?p=18947#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/ifintechworld.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Oil: Saudi maneuver itself won\u2019t bring $80-$90 a barrel – Citi\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/ifintechworld.com\/#website\",\"url\":\"https:\/\/ifintechworld.com\/\",\"name\":\"Repay Down\",\"description\":\"Latest Personal Finance News, Tips and Updates\",\"publisher\":{\"@id\":\"https:\/\/ifintechworld.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/ifintechworld.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/ifintechworld.com\/#organization\",\"name\":\"Repay Down\",\"url\":\"https:\/\/ifintechworld.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png\",\"contentUrl\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png\",\"width\":558,\"height\":90,\"caption\":\"Repay Down\"},\"image\":{\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61\",\"name\":\"News Room\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png\",\"contentUrl\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png\",\"caption\":\"News Room\"},\"sameAs\":[\"https:\/\/ifintechworld.com\"],\"url\":\"https:\/\/ifintechworld.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Oil: Saudi maneuver itself won\u2019t bring $80-$90 a barrel - Citi | iFintechWorld","description":"Investing.com -- Saudi Arabia\u2019s 1-million-barrels-per-day oil cut that will reduce its output by 20% in total in July won\u2019t by itself bring a barrel to","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/ifintechworld.com\/?p=18947","og_locale":"en_US","og_type":"article","og_title":"Oil: Saudi maneuver itself won\u2019t bring $80-$90 a barrel - Citi | iFintechWorld","og_description":"Investing.com -- Saudi Arabia\u2019s 1-million-barrels-per-day oil cut that will reduce its output by 20% in total in July won\u2019t by itself bring a barrel to","og_url":"https:\/\/ifintechworld.com\/?p=18947","og_site_name":"iFintechWorld","article_published_time":"2023-06-06T16:40:21+00:00","article_modified_time":"2023-06-06T16:40:22+00:00","og_image":[{"width":800,"height":533,"url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/05\/LYNXNPEBA20ZO_L.jpg","type":"image\/jpeg"}],"author":"News Room","twitter_card":"summary_large_image","twitter_misc":{"Written by":"News Room","Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/ifintechworld.com\/?p=18947#article","isPartOf":{"@id":"https:\/\/ifintechworld.com\/?p=18947"},"author":{"name":"News Room","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61"},"headline":"Oil: Saudi maneuver itself won\u2019t bring $80-$90 a barrel – Citi","datePublished":"2023-06-06T16:40:21+00:00","dateModified":"2023-06-06T16:40:22+00:00","mainEntityOfPage":{"@id":"https:\/\/ifintechworld.com\/?p=18947"},"wordCount":940,"commentCount":0,"publisher":{"@id":"https:\/\/ifintechworld.com\/#organization"},"keywords":["Featured"],"articleSection":["Commodities"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/ifintechworld.com\/?p=18947#respond"]}]},{"@type":"WebPage","@id":"https:\/\/ifintechworld.com\/?p=18947","url":"https:\/\/ifintechworld.com\/?p=18947","name":"Oil: Saudi maneuver itself won\u2019t bring $80-$90 a barrel - Citi | iFintechWorld","isPartOf":{"@id":"https:\/\/ifintechworld.com\/#website"},"datePublished":"2023-06-06T16:40:21+00:00","dateModified":"2023-06-06T16:40:22+00:00","description":"Investing.com -- Saudi Arabia\u2019s 1-million-barrels-per-day oil cut that will reduce its output by 20% in total in July won\u2019t by itself bring a barrel to","breadcrumb":{"@id":"https:\/\/ifintechworld.com\/?p=18947#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/ifintechworld.com\/?p=18947"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/ifintechworld.com\/?p=18947#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/ifintechworld.com\/"},{"@type":"ListItem","position":2,"name":"Oil: Saudi maneuver itself won\u2019t bring $80-$90 a barrel – Citi"}]},{"@type":"WebSite","@id":"https:\/\/ifintechworld.com\/#website","url":"https:\/\/ifintechworld.com\/","name":"Repay Down","description":"Latest Personal Finance News, Tips and Updates","publisher":{"@id":"https:\/\/ifintechworld.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/ifintechworld.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/ifintechworld.com\/#organization","name":"Repay Down","url":"https:\/\/ifintechworld.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/","url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png","contentUrl":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png","width":558,"height":90,"caption":"Repay Down"},"image":{"@id":"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61","name":"News Room","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/image\/","url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png","contentUrl":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png","caption":"News Room"},"sameAs":["https:\/\/ifintechworld.com"],"url":"https:\/\/ifintechworld.com\/?author=1"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/18947","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=18947"}],"version-history":[{"count":1,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/18947\/revisions"}],"predecessor-version":[{"id":18948,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/18947\/revisions\/18948"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/media\/3666"}],"wp:attachment":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18947"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18947"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18947"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}