Citi Forecasts Brent Crude Price Drop to $60 as OPEC+ Increases Production

What's Happening?

Citi analysts have projected a decrease in Brent crude oil prices to $60 per barrel by the end of the year, influenced by increased production from OPEC+ and China's stockpiling activities. The bank's revised global liquids balance outlook follows OPEC+'s announcement to unwind an additional 1.6 million barrels per day of voluntary cuts starting in October 2025. This increase in production is expected to lead to stock builds, adding slack to the global supply. Citi's analysis includes scenarios where Brent prices could fall below $60 due to weaker global demand and faster growth in non-OPEC supply, or rise above $75 due to geopolitical disruptions.

Why It's Important?

The forecasted drop in Brent crude prices has significant implications for the global oil market, affecting both producers and consumers. Lower prices could benefit industries reliant on oil, reducing operational costs and potentially leading to lower consumer prices for goods and services. However, oil-producing countries and companies may face reduced revenues, impacting economic stability and investment in energy infrastructure. The increased production by OPEC+ reflects strategic decisions to balance market supply and demand, influencing global energy policies and economic forecasts.

What's Next?

As OPEC+ ramps up production, stakeholders in the oil industry will closely monitor market reactions and adjust strategies accordingly. Potential geopolitical disruptions could alter price forecasts, necessitating contingency plans for both producers and consumers. The evolving dynamics of global oil demand, influenced by trade disputes and economic growth, will play a crucial role in shaping future market conditions. Companies and governments may need to reassess their energy policies and investment strategies in response to these developments.