A recent surge in the price of oil is simply a “head-fake,” and oil as cheap as $20 a barrel could be around the corner in 2015, according to report from Citigroup that was released on Monday, February 9th.

In Citigroup’s report, Edward Morse – the firm’s global head of commodity research – said that Brazil and Russia are continuing to produce oil at record levels, while Saudi Arabia, Iraq, and Iran are fighting to maintain their market share by slashing prices to Asia. [Oil Plunge To $20 Could Be On The Horizon, Citigroup Warns].

Brent crude, the global benchmark, hit a six-year low in January.

So how low can oil prices go? Gary Shilling, a US consultant, suggested prices could drop as low as $10 per barrel.

Of course, quite how low prices can actually fall partly depends on which producer you’re speaking to. While developing economies such as Venezuela have high costs, meaning anything under $125 per barrel is a bit of a stretch, many super-efficient producers in the US and the Persian Gulf could keep going, even if prices drop below $20 – for some, that figure’s as low as $10”,

City AM reported.

The plummeting oil prices are being pushed even lower by three major factors according to Shilling.

Energy-efficient technology. Oil production is forecast to rise. OPEC does not want to give up on its market share.

RT reported yesterday the following:

Saudi Arabia, the world’s biggest crude oil exporter, cut shipments overseas by 5.7 percent in 2014 following a decline in demand from China, its largest customer. Saudi Arabian exports were estimated at 7.11 million barrels a day in 2014, down from an 11-year high of 7.54 million barrels a day in 2013. The volume of overseas shipments is the lowest in three years, according to the Joint Organizations Data Initiative. In December, exports dropped five percent month-to-month to 6.9 million barrels a day. Falling demand for oil became one of the factors posing risk to Saudi Arabia’s leading position in the oil market. To protect its share, the Saudis have been aggressive in giving the largest discounts to Asian customers in more than a decade.

Saudi Arabia is concerned in Russia’s increasing oil supplies to Asia. It’s worth noting that Russia increased its sales to China, Japan and South Korea by 25 percent in 2014.

It seems that Saudis are more interested in keeping market share unchanged. That explains why they are not interested to cut production in order to push prices up. That’s one of the major factors that contributed to oversupply and a steep fall in oil prices that have lost more than 50 percent since summer 2014.

There is one more very important politically driven factor. John Kerry, the US Secretary of State, allegedly struck a deal with King Abdullah in September last year under which the Saudis would sell crude at below the prevailing market price. That way the U.S. policy makers have been trying to intensify their economic war on Moscow [Oil Coup: The Secret U.S.-Saudi Deal – OpEd].

Saudi Arabia’s refusal late last year to rein in oil production helped trigger the price crash that has hurt oil-producing countries and publicly listed energy companies alike. And now even the kingdom’s own oil company is feeling the pain,

the WSJ reported.

Big #oil gets a little skinnier as prices plummet http://t.co/4o8guMgyCg pic.twitter.com/GCRKqAfEsL — Pedro da Costa (@pdacosta) February 20, 2015

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