Citi has projected that oil prices could fall to $60 per barrel next year if OPEC+ does not impose additional production cuts. The forecast, detailed in a note to clients on Wednesday, reflects concerns about slowing demand and increasing supply from non-OPEC producers.
Citi further warned that if Brent crude prices drop to the $60 range, they could potentially fall to $50 per barrel due to financial market movements before recovering. The report indicates that geopolitical tensions are not significantly influencing oil prices. Although these tensions have temporarily driven prices up, each rebound has been weaker than the last. The market now seems to recognize that geopolitical issues do not always lead to immediate supply disruptions, making major headlines, like those related to Israel and Gaza, merely opportunities for selling during temporary price increases.
Citi expressed worry that if OPEC does not extend its current output cuts, the market may lose confidence in the cartel’s ability to maintain oil prices at $70 per barrel.
Citi has made similar grim forecasts in the past, some of which have proven inaccurate. In June, the bank predicted a $60 Brent crude price for 2025, citing a long-term bearish trend despite OPEC+ production cuts. At that time, Citi advised oil producers to hedge against potential price drops and suggested investors take bearish positions to benefit from short-term price increases.
On Wednesday, oil prices hit their lowest point in nine months due to concerns about demand and possible supply increases. The note also mentioned that OPEC+ might reconsider its plan to reduce production cuts in October in response to the price decline. As of the latest update, Brent crude was trading below $73, and U.S. benchmark WTI was trading below $70.