Singapore January 12 2024: Citi Research on Friday lowered its Brent price forecasts for this year and 2025, citing oversupply concerns but expects prices holding above $70 per barrel in 2024 as OPEC+ keeps global oil markets “finely balanced”.
Citi cut its 2024 Brent price forecast by $1 to $74 per barrel and slashed 2025 forecast by $10 to $60 per barrel, but said in a note that recent activity in the Red Sea causing further tension in the Middle East could see near-term upside to the risk premium.
“We believe softer market fundamentals, absent major supply disruptions, will result in OPEC+ rolling over its Q1 2024 production cuts throughout the whole 2024 and start tapering them only in H2 2025,” analysts at Citi said.
“2025 looks to pose more challenges for OPEC+, as a large surplus looms despite extended production cuts, which in our base case is likely to make it increasingly difficult to protect $70/bbl on a Brent basis,” Citi noted.
