Citi warns that the oil market is tighter than it looks and could squeeze higher next year

Citi says oil could rally

Libya, Nigeria, Venezuela, Iran and Iraq are all pumping at close-to capacity and a supply gap could be emerging, according to Citigroup head of commodities research Ed Morse.

"Fear in the market has been that OPEC production will rise dramatically," said Morse. However, "there could be a supply gap emerging, which could point to a tighter market," he told Bloomberg.

He said the lack of investment in OPEC countries in future production are lagging.

After a bit rally yesterday, WTI is at the lows of the day today, down 57-cents to $51.66.