Citi: Oil Prices Unlikely To Hit The High $80s After Saudi Output Cut

While many analysts see the latest Saudi oil cut surprise as bullish or at least moderately bullish for prices, Citigroup thinks that the 1 million bpd cut from the world’s top crude exporter is not likely to result in an oil price run-up to the high $80s or low $90s per barrel. “The likelihood that Saudi Arabia would tackle this on its own on a sustained basis is quite low,” Citi said in a note on Tuesday carried by Reuters.

The bank, like other investment banks, believes the cut will lead to a wider deficit on the market in…