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Citigroup: No need to fear of falling oil prices to 20 USD

According to expert, the new wave of fall of oil prices will lead to more serious consequences in terms of reducing supply on world markets

Baku. 30 December. REPORT.AZ/ Further decline of oil prices is unlikely, since too great profitability of the world's oil complex would be called into question.Report informs, senior strategist at Citigroup on the US stock market, Tobias Levkovich said that in an interview with Bloomberg.

According to expert, the new wave of fall of oil prices will lead to more serious consequences in terms of reducing supply on world markets. In this regard, according to Levkovich, the probability of a drop in oil prices to the level of 20 dollars per barrel is extremely low.

In case if the oil really will test these levels, there will be a sharp rebound of quotations. "In addition, in my view, virtually the only scenario in which prices could fall to the level of 20 dollars per barrel, a recession in the world economy. This oil price is a sharp decline in world oil demand.At 20 USD a barrel, most shale in the US are unprofitable, and this also applies to many projects around the world.

This immediately lead to a sharp decrease in demand.So even if this correction does happen, I think, quickly followed by a rebound in prices due to the potential imbalance of supply and demand."

In an interview Levkovich also noted that his colleague, chief strategist at Citigroup in commodity sector Edward Morse expects that by the end of 2016 the quotations of oil will be at 55 dollars per barrel.

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