Oil Price Forecast: Citi ​Predicts Potential Drop to $60 ⁢per Barrel in⁣ 2025

Citi analysts have warned that if the OPEC+ group does not⁤ accept further production cuts, the average oil price could fall to $60 per barrel in 2025 due to reduced​ demand and increased supply from non-OPEC countries.

Despite the ⁢prospect of a technical recovery in oil prices,​ the market may lose ​confidence in OPEC+’s ability to‍ maintain prices at $70 a barrel ⁣unless the group commits to extending current production cuts indefinitely.

Market Factors and Price Forecasts

Citi analysts‌ predict that if Brent prices fall to⁢ $60, ⁤financial flows could reduce them before a possible‌ recovery, perhaps to $50 a barrel.

Geopolitical tensions ⁣were initially expected to push oil prices higher, but the recovery⁣ since ⁤October 2023 has ⁢weakened. ‍The market ‌has now realized that tension does not⁢ necessarily mean ⁢lower production or transportation problems,‍ making profit selling an‍ opportunity.

The recent rebound in Libyan production and expectations that the disruption ⁣would be short-lived due to the lack of ongoing hostilities have prompted some market participants to resume short⁤ selling of oil.

Expert Recommendations and Forecasts

Citi ⁣recommends selling if Brent crude rises to⁣ near $80 in light‍ of current market conditions.

Goldman Sachs⁢ has cut its average ⁣2025 Brent price forecast and price range by $5 per barrel, citing ⁣slower demand in China.

On the other hand, UBS expects Brent crude prices to rise above $80 a barrel in the ⁣coming ‍months, based on the fact that the oil market is ⁢suffering from⁤ a lack of supply despite weak Chinese demand and strong demand elsewhere.

OPEC+ Production Cuts and Market Impact

OPEC+ has confirmed a plan to begin the‌ latest round of cut easing, to the tune of 2.2⁤ million barrels per day,‍ starting ‍in October, while warning of the⁤ possibility of ⁢temporarily ‍halting the easing or withdrawing from it if necessary.

Four OPEC+ ⁣sources have revealed that the group is discussing⁣ suspending a planned production increase next month as oil prices fell to a ⁣nine-month low.