Oil Could Drop to US$20 Per Barrel
Published By : 13 Feb 2015 | Published By : QYRESEARCH
The fall in crude oil prices in the last quarter of 2014 was one of the most discussed events of the year. The political and economical repercussions of the staggering drop, in which the prices for crude oil dropped below US$50 for the first time in years, could have long-standing effects well beyond the circle of the petroleum industry. Russia’s economy suffered badly due to the fall in oil prices, brought about by a rise in oil production in non-OPEC countries, and faced the worst economic depression for quite a while. The Ruble fell to an all-time low, while other OPEC countries also suffered.
Unfortunately for the countries that bore the brunt of it, the drop in oil prices seems set on continuing well into 2015. Although the recent movement in oil prices has been upward, industry experts are divided on whether this is a serious resurrection or a false dawn for a battered commodity.
Citigroup analysts, who fall very much on the pessimistic end of the scale, recently estimated that West Texas Intermediate oil prices could drop as low as US$20 per barrel before any real chance of steady recovery emerges. This is a low mark Nymex oil hasn’t hit since 2002.
Citi analysts expect oil prices to bottom out sometime between the end of the first quarter and the start of the second quarter of 2015. However, oil prices rose above US$50 this week, closing at more than US$52 per barrel. Citi has predicted that WTI oil prices will end up at US$46 per barrel in 2015 and Brent crude oil will end up at US$54.
Citi isn’t alone in their grim prediction, as other giants such as the Wall Street Bank aren’t holding much hope for a recovery of oil prices in the coming months.