(Bloomberg) - Demand for oil and refined products is falling as the economy starts bracing for a recession, said Ed Morse, Citigroup Inc.’s global head of commodity research.
The fair value of Brent futures is in the $70 range even though the international benchmark is trading around $120 a barrel, the well-known oil market bear said Tuesday a Bloomberg Television interview. Analysts continue to revise their demand expectations on signs of economic slowdown, Morse said.
Citi cut its demand estimate for products to 2.2 million barrels a day, down from 3.6 million barrels at the start of the year.
“That’s a big difference if you are pulling on a refining system that is under duress,” Morse said. “A world staring at a recession is not a world with robust demand growth for diesel.”
By Julia Fanzeres, Guy Johnson and Alix Steel
