Despite some experts calling for oil prices to sink as low as US$40 a barrel, Citi analysts believe that the worst is finally over for the wailing energy sector.
After having lost around 40% of its value since mid-June, crude oil has crashed particularly hard since the OPEC meeting last week, in which time it has dropped around 10% to a fresh five-year low. Brent oil dropped as low as US$67.53 a barrel while West Texas Intermediate (WTI) fell to just US$63.72.
As reported by The Australian Financial Review however, Citi believes that, given the speed and intensity at which the commodity has already fallen, it was unlikely to fall any further in the short term, and maybe even the medium term. Indeed, the oil price rallied slightly overnight with Brent oil climbing back to US$72.05 per barrel.
Of course, an enormous path of destruction has already been laid, reflected by the bloodbath on the ASX in the last two days in which $50 billion was wiped from the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO). Companies such as BHP Billiton Limited (ASX: BHP), Woodside Petroleum Limited (ASX: WPL) and Oil Search Limited (ASX: OSH) have fallen particularly hard, while Liquefied Natural Gas Limited (ASX: LNG) and Senex Energy Ltd (ASX: SXY) have declined roughly 30% each.
