In a recent report, analysts at Citi discussed the story that is currently playing out in the North American oil production space. Although the price of crude oil is down about 50 percent in the past year, Citi believes the worst could still be yet to come for crude oil prices.

New Commodity Environment

Analysts believe that the "Commodity Supercycle" of the past decade has been driven by rapid growth in global demand from countries such as China. Analysts now see this cycle drawing to a close.

In its wake, they see four new themes emerging in commodities:

1. Global trade growth will slow as population growth slows and China transitions to become more energy-efficient.

2. Natural resource exporters will shift downstream in an attempt to capture more of the value chain.

3. The U.S. energy revolution will continue to re-shape the oil and gas environment.

4. The development of emerging markets will continue to be key in shaping the future commodity trade landscape.

North American "Day Of Reckoning"

According to Citi analysts, the U.S. is "bursting at the seams" with crude oil after the huge production ramp-up that has occurred during the energy revolution. According to the report, the U.S. is currently maxing out its legal crude oil export capacity.

Citi sees U.S. government bans and limits on crude oil and condensate exports as a major problem. "In the end, there remains an inevitable day of reckoning when U.S. crude production cannot escape its North American confines, pushing down U.S. crude oil prices and endangering production, without widely liberalized exports," analysts explain in the report.

Citi predicts that the pressure of falling oil prices will eventually lead to drastic increases in U.S. crude oil export allowances. Citi expects the U.S. to become a net exporter of crude oil and petroleum products by as soon as 2018.

Price Outlook

According to the report, the crude oil price environment will remain unstable for quite some time.

Shares of the United States Oil Fund LP ETF (NYSE: USO) reached a new all-time low this week; shares were down more than 2 percent at $15.98 on Tuesday,

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