Oil market be better off preparing for an oil squeeze - Citi

Ed Morse, the bank’s global head of commodities, said in an interview in Singapore on the sidelines of the S&P Global Platts APPEC Conference, oil market should be prepared for a supply shortage rather than fearing over a flood of OPEC supply next year.

Key Quotes:

Five countries in the group -- Libya, Nigeria, Venezuela, Iran and Iraq -- may already be pumping at their maximum capacity this year.

“Fear in the market has been that OPEC production will rise dramatically.”

However, “there could be a supply gap emerging, which could point to a tighter market.” 

If the output reductions are prolonged, that would only hasten the prospect of a tighter market

“We’re seeing more and more evidence that it’s not the international oil companies, it’s not the independent oil companies that are lagging new investments, but it’s OPEC countries lagging, particularly those five.”