Citigroup Bank has adjusted its expectations for the price of Brent crude for the current and upcoming year, citing concerns about an oversupply of oil.

However, the bank also acknowledged the potential for an increase in the risk premium due to security tensions in the Red Sea and the Middle East, reports Al-Anba daily.

In a memorandum released on Friday, Citigroup’s research unit explained that the bank has revised down its projections for the price of a barrel of Brent crude by one dollar to $74 in 2024. Additionally, estimates for 2025 have been lowered by $10 to $60 per barrel.

The memorandum highlighted the anticipation of Brent crude oil prices stabilizing above $70 per barrel in 2024, thanks to OPEC+ maintaining a well-balanced global market. However, recent developments in the Red Sea, causing heightened tensions in the Middle East, may elevate the risk premium in the short term.

Citigroup analysts emphasized that, given the current weak market fundamentals and the absence of significant supply disruptions, OPEC+ is likely to extend production cuts planned for the current quarter throughout the entirety of 2024. The analysts also suggested a gradual easing of these measures in the second half of 2025.

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