Citi Predicts Oil Prices May Fall Below $60 a Barrel in 2025

Citi analysts project a decline in oil prices, forecasting them to reach $60 per barrel by 2025. This indicates a possible drop of over 20% from current market expectations.

According to the analysts, “Our 0-3 month forecast is $82 per barrel before prices are expected to decrease during the fourth quarter and into 2025, when we anticipate they will stabilize at $60 per barrel.”

In the short term, Citi expects some price fluctuations, with potential upward pressures due to seasonal influences and ongoing geopolitical conflicts.

The pessimistic outlook for oil is attributed to an anticipated surplus in the global market by 2025, even considering production cuts from OPEC+. Analysts advise oil producers to “hedge” against possible price declines and suggest that investors should treat any short-term price spikes as opportunities for bearish investment positions.

On the other hand, Citi holds a positive outlook for copper, suggesting its price could rise to $12,000 per tonne by 2025. This favorable forecast is supported by factors like below-normal mine supply growth and increasing demand, especially stemming from China’s accelerated energy transition.

The report also emphasizes the notable difference in volatility between oil and copper, with Citi encouraging investors to capitalize on this contrast. They predict the copper-to-oil price ratio will reach 200 by 2025, compared to the current ratio of approximately 130.