Why you should buy oil right now

— Buy oil now, and count on Saudi Arabia for support, according to Citigroup.

The Opec’s output cuts aimed at easing a global glut are “real” and is cleaning up the market, analysts including Seth Kleinman wrote in a report. While prices have dropped recently amid rising US inventories and drilling activity, investors should take advantage of the slide because the Saudis are likely to defend prices this year, according to the bank.

The bank’s comments are similar to Goldman Sachs Group, which called for investors to be patient and said they should go, or stay, long on oil. Prices last week fell below $50 for the first time since December on concern rising US output will offset curbs by the Opec and other producers. While Saudi Arabia told the Opec it dialled back on some of its cuts last month, the extra supplies were moved into storage and the kingdom said it remains determined to stabilise the market.

“Citi views this sell-off as a buying opportunity for 2017,” the analysts wrote. “Running down the record level of inventories was always going to be a lumpy process, with tighter timespreads pushing oil out of tank and onto the physical market where it will weigh until it clears.”

While Saudi Arabia pumped more than 10 million barrels a day last month, the volume of crude supplied to markets nonetheless fell by 90,000 barrels a day to 9.9 million.