Analysts at Citi have adjusted their outlook for Brent crude in the near and mid-term, signaling concerns about oversupply pressures shaping the market. Reuters covered the update, noting a shift in the bank’s projections as global supply dynamics evolve and traders assess the trajectory of oil fundamentals through the remainder of the year and into 2025.
The revised Citi forecast lowers Brent from previous levels, placing the 2024 price around 74 dollars per barrel and penciling in a further drop to about 60 dollars per barrel for 2025. The adjustments reflect a cautious assessment of production discipline and the potential for higher supply from non-OPEC sources, as well as evolving demand patterns as economies adjust to policy changes, inflation trajectories, and energy market volatility.
Market participants expect that price support will continue to hinge on voluntary output reductions by OPEC plus members during 2024. Analysts believe that these cuts, coupled with careful production management among oil producers, can help underpin prices even as other supply-side forces come into play. In addition, recent activity in the Red Sea region has traders weighing possible short-term upside scenarios, given geopolitical tensions and their potential to disrupt shipping lanes and prompt risk premiums in energy markets.
Oil benchmarks traded in positive territory on Friday as the market digested geopolitical developments and the evolving supply outlook. The move higher in futures prices followed a series of diplomatic and military developments in the Middle East region and assessments of how those events might interact with global crude flows. Market data from the ICE exchange showed Brent futures for March edging higher, while WTI futures for February also rose, reflecting a broader risk-on tone in energy and a reassessment of regional risk premia by traders.
The question of how the Yemen issue may affect Russia’s oil and gas revenues is a topic of ongoing analysis. Insights on this topic are discussed in detail in a forthcoming material from socialbites.ca, which examines the broader implications for export earnings, fiscal planning, and energy policy in the current geopolitical climate. The situation in Yemen remains a critical variable for energy markets, influencing negotiations, shipping costs, and the timing of supply adjustments across major producing regions.
Earlier, German Foreign Minister Annalena Baerbock stated that the United States and United Kingdom attacks against Houthi targets in Yemen were conducted in line with the UN Charter. This framing underscores the contentious geopolitical dynamics at play and their potential to affect regional stability, trade routes, and the broader environment in which energy markets operate. Analysts continue to monitor how these developments interact with sanctions regimes, insurer risk, and the cost of capital for oil projects in key producing nations.