Citi analysts and Brent

Citi Analysts: Brent Prices Face Decline in 4Q and 2024

In a remarkable surge, oil prices catapulted an impressive 28% on average over the past quarter, attaining four-month peaks. This dramatic upswing can be attributed to substantial production curtailments by OPEC+ nations, coupled with strategic supply reductions implemented by major players Saudi Arabia and Russia. Despite this recent bullish trend, analysts at Citi maintain a bearish outlook on oil prices, anticipating a downturn in crude values during the fourth quarter, forecasting Brent to settle at an average of $82 in 4Q, and stabilize at $74 throughout 2024. 


This cautious projection hinges on the anticipated acceleration in supply from non-OPEC+ members including the United States, Brazil, Canada, and Guyana. Additionally, an upswing in exports from Venezuela and Iran further contributes to this tempered prognosis.


In stark contrast, financial heavyweights Goldman Sachs and RBC Capital have revised their price targets, setting their sights on the coveted $100 per barrel threshold within the next year. Their optimism hinges on the belief that sustained momentum could propel oil to these elevated heights.


A keen understanding of the oil market’s supply and demand fundamentals is paramount to staying abreast of these developments. Presently, low inventory levels at US storage facilities signal an ongoing supply crunch. However, the potential for continued reduction in OPEC+ output and constrained export activities may serve as stabilizing factors for prices in the interim.


Nonetheless, Citi analysts’ cautious outlook on Brent prices underscores their skepticism regarding the sustainability of current highs, projecting an average of $82 in 4Q and $74 for 2024. A thorough examination of economic indicators and trends is imperative to making informed investment decisions, providing investors with the insight needed to navigate the oil market’s undulating landscape.


While the current bullish trajectory of oil is promising, analysts express apprehension that prices may eventually recede in the coming months. In the interim, vigilance on the equilibrium of oil market supply and demand, as well as staying attuned to the most recent economic news and indicators, is recommended for investors.

Source: Yahoo Finance

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