Citigroup Forecasts Crude Oil Price Drop to $70/Barrel in 2024

Citigroup Inc. has predicted that there shall be a drop in crude oil prices next year, with a likely reduction to US$70 a barrel. This is primarily because of lower demand and an anticipated “peak transport fuel demand” according to the U.S. Bank.

Currently, at US$92, oil prices have risen steadily due to production cuts by key producers Saudi Arabia and Russia since the middle of the year.

The global market will shift towards a surplus next year, which is anticipated by Citi. This shift will result in a drop in crude prices, and they will stabilize at around US$70 per barrel on average. WTI oil prices and Brent both will be reduced.

Among economists, there is concern about a resurgence in inflation due to the recent price spike, primarily from petrol and other fuel prices. If the price were to exceed US$100 a barrel, this concern would grow even stronger. Citi’s head of commodities research Ed Morse, however, sees this going in the opposite direction  

“Demand looks constrained as the pandemic recovery factors continue to ease off and peak transport fuel demand looms, while supply is growing in non-Opec+ suppliers,” said Ed Morse.

The decline should start towards the end of the current quarter, Morse predicts, and carry on further in 2024.