Citigroup also projects a greater likelihood of persistent shortage of oil than a big jump in supply over the coming quarters. Ed Morse, global head of commodities at the bank, said that a handful of Organization of Petroleum Exporting Countries might already be pumping at maximum capacity already, and due to weak investment in exploration and development, there is a greater risk of a market squeeze once demand picks up, especially from a growing Chinese economy.

“Fear in the market has been that OPEC production will rise dramatically,” Morse said, according to Bloomberg. However, “there could be a supply gap emerging, which could point to a tighter market.

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High demand in emerging markets, along with increasing demand in Europe, could help diminish the global supply glut and propel oil prices higher.

“We see the market over the next six months going well above $60 for a simple reason … surprisingly good demand,” Adi Imsirovic, Head of Oil Trading at Gazprom Marketing and Trading, said at the S&P Global Platts APPEC conference in Singapore, as quoted by Reuters. “We see the market tightening strongly, we see oil moving out of storage quite fast.”

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