(Bloomberg) -- The outlook for oil demand likely will see further downward revisions amid higher fuel prices, said Ed Morse, global head of commodity research at Citigroup Inc.

“Almost everybody has reduced their expectations of demand for the year,” Morse said in a Bloomberg Television interview Wednesday. Citigroup reduced its forecast by about a third to 2.4 million-2.5 million barrels a day, similar to the US Energy Information Administration and the International Energy Agency. “Demand is simply not growing on an empirical basis to the degree that people had expected.”

Oil prices have soared this year as global demand returned with economies slowly emerging from the pandemic. While crude prices are hovering around $100 a barrel, Citigroup reiterated its base case for oil prices at $85 a barrel, adding that supply is “accelerating” into year-end.

Read more: Citi says oil may collapse to $65 by year-end if recession hits

“We don’t see the burgeoning demand coming out of China,” Morse said, noting that the nation has been building stockpiles this year.


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