“These supply losses could come from a return to higher levels of disrupted supply in Libya or Nigeria, falling back after the recent recovery. It could also come from new disruptions in Venezuela,” Citi said.
Related: Oil ETFs Look for Supply Catalysts
On the other hand, oil could tank below $40 if disruptions elsewhere get resolved and floods the market with more supply.
U.S. producers could act as a stabilizing agent as shale oil drillers can quickly balance out supply shocks by pumping out more or less to bring prices down to Citi’s projected range.
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