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A new report by Citigroup projects that oil prices could fall to as low as $20 per barrel this year despite recent price surges.

The report published Monday said global production levels are not likely to drop until the third quarter.

Production in the United States has continued to rise since oil prices began plummeting in July while output in Russia and Brazil have hit record levels.

The report said West Texas Intermediate Crude, currently trading at about $52 per barrel, could fall to $20 “for a while” until the current supply glut is worked off.

The flood of U.S. produced shale crude hitting the market has also hurt OPEC’s ability to control prices and secure maximum profits for producers.

“While many analysts have seen in past market crises ‘the end of OPEC,’ this time around might well be different,” Citigroup’s global head of commodity research Edward Morse said.

Citigroup said Brent prices in the range of $45 to $55 are not viable and will set off a “divestment from oil.”

The report said prices are likely to rebound up to $75 per barrel in the fourth quarter although the group pegged its average annual price forecast for Brent at $54 per barrel.


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