Citi Analysts Predict Oil Price Decline to $60 by 2025, Switching to Copper-Play

Citi analysts are forecasting a drop in oil prices, with an expectation of $60 per barrel by 2025, representing a potential decrease of more than 20% compared to current market estimates.

According to Citi, the near-term forecast for Brent crude is $82 per barrel, with prices expected to decrease in the fourth quarter of this year and into 2025.

Despite the bearish outlook for oil, Citi anticipates some volatility in the short term, citing potential upside risks related to seasonal factors and ongoing geopolitical tensions. The surplus expected in the global oil market by 2025, despite production cuts by OPEC+, underpins the pessimistic view. Citi recommends that oil producers hedge against potential price drops and advises investors to consider taking bearish positions during any short-term price increases.

In contrast to their oil forecast, Citi is bullish on copper, projecting a price increase to $12,000 per tonne by 2025. The positive outlook for copper is fueled by factors such as limited mine supply growth and increasing demand, particularly from China’s progressing energy transition.

The report emphasizes a notable disparity in volatility between oil and copper, with Citi suggesting that investors capitalize on this difference. They predict the copper-to-oil price ratio to rise to 200 by 2025, a significant increase from the current level of approximately 130.