Edward Morse, the worldwide head of commodities analysis at Citi Group, gave a bullish outlook for world oil markets Sunday, saying that present inventories had been at a “constructive” degree.

Crude futures have surged in latest months, with Brent and U.S. West Texas Intermediate (WTI) each rallying greater than 20 p.c because the begin of 2019. Worldwide benchmark Brent crude stood at $70 a barrel on Friday, with WTI buying and selling at round $63. Morse believes that extra upside is in retailer with provides being taken off the market in Iran and Venezuela, in addition to main oil cartel OPEC.

“I feel there’s way more upside than draw back,” he instructed CNBC’s Dan Murphy in Dubai Sunday.

“I feel it is below purchased, I feel it was oversold … The market may be very constructive, it is pretty tight and we predict it is going to be within the $70 vary by the second quarter and into the third quarter relying on what occurs. And there is quite a lot of variables between from time to time.”

One variable is whether or not the President Donald Trump administration will prolong sanctions waivers on eight international locations importing Iranian oil and he has till Might 2 to resolve. Morse believes that the main target for the U.S. shall be sanctions and Venezuela and this is able to seemingly see “kinder” actions on these importing Iranian oil.

In the meantime, Fereidun Fesharaki, the chairman of main consulting group FGE, backed up Citi’s forecast, telling CNBC Sunday that the availability and demand fundamentals will seemingly push the oil value as much as $75 and $80 for the second half of this yr.

“There could also be a Trump ceiling of $70 or near it however as far as the basics are involved, if no person touches something, the second half of this yr shall be $75, $80,” he instructed CNBC’s Dan Murphy.

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