(Bloomberg) -- Citigroup Inc (NYSE:C). said oil prices may hit $90 a barrel at times this winter as gas-to-oil switching drives stockpiles lower.
The bank, which raised its Brent oil forecast for the fourth quarter to $85, said inventories may dwindle to their lowest level on record in terms of days-of-cover by year-end. That comes as consumption gets a boost of as much as 1 million barrels a day from consumers switching away from natural gas to oil-based products amid surging energy prices.
Brent oil is already trading close to $85 a barrel, while West Texas Intermediate hit its highest since 2014 as traders gear up for higher levels of consumption amid a global energy crisis. At the same time the Organization of Petroleum Exporting Countries and its allies are only slowly returning supply to the market.
While the group is sticking to its plan to add 400,000 barrels a day of supply per month for now, it may choose to start doubling its rate of hikes to 800,000 barrels a day, under pressure from key consumers like the U.S., China and India, according to Citigroup.
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