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.