Citi Group forecasts sharp decline in oil prices to $60 this year

Citi Group has issued a striking forecast for the oil market. The investment bank expects Brent crude to fall to $60 to $65 per barrel by the end of the year. This would represent a significant discount from current levels, especially if the summer rally proceeds as planned.

Analysts see opportunities for sellers

According to financial news outlet Financial Times, analysts advise traders to take advantage of the summer rally in oil. This is the right time to reduce positions, the experts say. The logic behind this recommendation lies in the expectation that prices could fall significantly in the coming months.

Citi Group states that the memorandum of understanding between oil producers is likely to hold. Neither party has strong incentives to exit the agreement. This provides stability in negotiations, although the underlying market dynamics appear negative.

Soft demand and supply under pressure

The fundamental situation in the oil market looks weak. The balance between supply and demand shows little strength, according to Citi. Moreover, the market risks slipping into a surplus if producers ramp up production more quickly in response to a recovery in global consumption.

This dynamic puts heavy pressure on prices. Even as inventories normalise and seasonal demand increases, the upside seems limited. The likelihood of sustained downward pressure in the months through the end of the year appears greater than the potential for further price increases.