Oil rallied an average of 28% last quarter. Yet don't expect crude to stay at those elevated levels, say analysts at Citi.

On Monday West Texas Intermediate (CL=F) settled more than 2% lower at $88.82 per barrel. Brent International (BZ=F) futures closed at $90.71 per barrel.

"We hold a bearish view on oil where we forecast Brent to average $82 in 4Q, and $74 for 2024," wrote Citi's global head of commodities research Ed Morse in a fourth quarter outlook note.

Oil prices have been on an upward trend following OPEC+ production reductions and supply cuts by Saudi Arabia and Russia through year-end. Prices have also been supported by Russia limiting exports.

This has driven "oil higher in a prolonged bull run, but 4Q’23 is set to move lower, with further 2024 downside," reads the note.

"The Saudi appetite to withhold oil from market, supported by Russia maintaining a certain level of export constraint, points to higher prices in the short-term, all else equal, but $90 prices look unsustainable given faster supply growth," wrote Morse and his team.

Citi forecasters say production is growing among non-OPEC+ members like the US, Brazil, Canada, and Guyana. Also Venezuelan and Iranian exports have grown, note the analysts.

The recent rise in oil prices has fueled speculation of $100 per barrel oil in the coming months, including from Goldman Sachs, which recently raised its price target to reach that level within the next 12 months.

RBC Capital forecasters recently noted oil is "within striking distance" of reaching $100 if momentum continues.

Last Wednesday US crude futures temporarily hit a 2023 high after inventories at the largest storage hub in the US fell toward levels nearing operational minimums, underscoring the supply crunch in the market.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre.

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