Important Links

How will the Recent OPEC Meeting Affect Oil Prices?

4 December 2017Economics
Picture
  • Although OPEC's oil-producing member countries agreed to extend their oil production cuts to the end of 2018 at last week's OPEC meeting, there remains a chance that the production cuts could end earlier. The members agreed to a June review process to assess price and inventory levels, compliance by member states to agreed limits as well as other market conditions.
  • Citi analysts believe that if oil prices are high and markets are tight, there is increased likelihood that normal production levels will resume. However, Citi also believes that lower prices could increase the likelihood of both OPEC and non-OPEC producers suggesting that the deal carry on through 2018 at the June review – which should be supportive of oil prices.
  • Meanwhile, the battle between shale and OPEC continues as US Energy Information Administration (EIA) data indicate that US crude production was some 290k barrels per day higher month-over-month in September than data originally indicated. Citi's own projection of US production growth year-over-year in 2018 is in a range of 1m barrels per day, with 800k barrels per day coming from shale.
  • Citi expects global economic growth levels to be positive for oil product demand and oil balances. On the contrary, the impact of limited supply is prompting enough new supply to neutralize the demand effects. Hence, Citi's 2018 annual oil price expectation remains unchanged at $54 per barrel. The West Texas Intermediate (WTI) crude oil price is currently at $58.22.

Our recent research

Picture

Sterling appreciation slowed by inflation data

Year-to-date Sterling has been remarkably resilient, with GBP/USD edging back to the pre-EU Referendum levels, and GBP/EUR reaching the highest levels since June 2017. GBP/USD traded to a high a high of 1.43761 and GBP/EUR touched 1.15992

Find out more

FX
Picture

Political Risks Take Center Stage

Following reports of new chemical weapons attacks on Syrian civilians, the US, UK and France have launched more than 100 missiles against Syrian chemical weapons facilities.

Find out more

Politics
Picture

Robotics: Industry Trends and Investment Opportunities

Technology disruption is driving the robotics and automation to next level. Watch the video to find out more on the potential investment opportunities within this space.

Find out more

Market outlook videos

Take the first steps to your wealth management planning with Citi

Speak to a Relationship Manager
0207 500 1992

Already with Citi? Contact your relationship manager or view product availability on Citi Online

Why choose Citi

A relationship - not just a bank account

A dedicated Relationship Manager giving you access to our internal team of product experts and all our benefits

Access to exclusive Citi products

A range of current and investment products available both on shore and offshore, in the currency of your choice
Multi-currency accounts
Investment products

Global services for a global lifestyle

Our team is here to support you getting started in UK or with International travel and relocation
Moving to and from the UK
Travelling overseas

Offshore investments

We offer a diverse range of banking and investment services, including for those who want access to offshore investments

Find out more

Just moved to the UK?

We can save you time money and hassle. If you are a foreign national in the UK, Citi's International Banking Service can help you manage your money, home and away.

Find out more

Investment products are not insured by any governmental agencies, are not bank deposits, and are neither obligations of, nor guaranteed by, Citigroup, or any of its affiliates, unless otherwise stated. Investment products are subject to investment risks, including possible loss of some or all of the principal amount invested. Past performance is not indicative of future results, investments can go down as well as up.

“Citi analysts” refers to investment professionals within Citi Research (“CR”), Citi Global Markets Inc. (“CGMI”) and voting members of the Citi Global Investment Committee. Citibank N.A. and its affiliates / subsidiaries provide no independent research or analysis in the substance or preparation of this document. The information on this page has been obtained from reports issued by CGMI. Such information is based on sources CGMI believes to be reliable. CGMI, however, does not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute CGMI’s judgment as of the date of this page and are subject to change without notice. This page is for general information purposes only and is not intended as a recommendation or an offer or solicitation for the purchase or sale of any security or currency. No part of this page may be reproduced in any manner without the written consent of Citibank N.A. Information on this page has been prepared without taking account of the objectives, financial situation, or needs of any particular investor. Any person considering an investment should consider the appropriateness of the investment having regard to their objectives, financial situation, or needs, and should seek independent advice on the suitability or otherwise of a particular investment. Citi Research (CR) is a division of Citigroup Global Markets Inc. (the "Firm"), which does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this information. Investors should consider this information as only a single factor in making their investment decision.

Opinions expressed herein may differ from the opinions expressed by other businesses or affiliates of Citigroup, Inc., and are not intended to be a forecast of future events, a guarantee of future results or investment advice, and are subject to change based on market and other conditions.

Start your Citigold relationship

How to apply >

Enjoy a welcome reward of up to £1,000 when you join us. T&C's apply