Oil price to fall below $60, Citi reiterates

We could see $60-per-barrel oil prices in 2025 if OPEC+ fails to implement more production cuts, Citi said in a Wednesday note to clients, citing slowing demand and strong supply coming from non-OPEC producers.

Further into its doomsday oil pricing, Citi said that once Brent crude prices drop to the $60 range, they could get pushed down further to $50 a barrel due to financial flows before rebounding. 

Citi noted that geopolitical tensions are not having a huge, direct impact on oil prices. While geopolitical tensions have been temporarily raising oil prices, Citi said that each rebound is weaker than the previous. Additionally, Citi noted that the market now seems to understand that geopolitical tensions do not immediately mean supply disruptions. That makes every major Israel-Gaza headline simply an opportunity to sell on the temporary upswing. 

Citi is concerned that if OPEC refrains from extending output cuts beyond its current plan, the market could lose confidence in the cartel’s ability to defend oil at a $70 mark. 

Citi has issued such dire forecasts before, and it has been wrong before. 

In June, Citi issued another bleak forecast for 2025, anticipating $60 Brent crude in a long-term bearish trend. Citi said it expected surplus in the global oil market by 2025 despite OPEC+ output cuts. At that time, just three months ago, Citi advised oil producers to hedge against potential price drops and recommended that investors capitalize on short-term price increases by taking bearish positions. 

On Wednesday, oil prices fell to their lowest level in nine months on concerns about demand and potential supply increases.

The Citi note to clients also comes as OPEC+ is said to be reconsidering its plan to ease production cuts in October due to the price slump. At the time of writing, Brent crude was trading below $73 and U.S. benchmark WTI was trading below $70.