Brent crude may average $60 per barrel next year: Citi Research

Citi Research analysts expect further weakness in oil prices next year as the global market shifts to a surplus after a seasonal deficit in the fourth quarter.

Losses from Libya's output and Russia’s greater compliance with OPEC+ commitments should support Brent above $70 in the near term, said the research firm.

It also expects Chinese oil demand to rise by 300,000 barrels per day (bpd) year-on-year in Q4 2024, after contracting in the previous two quarters.

Furthermore, Brent prices are expected to average $60 per barrel as the market shifts to a surplus of about one million bpd, even assuming continued OPEC+ production cuts and declining compliance from Russia, Kazakhstan, and Iraq.

Analysts also expect OPEC+ to prioritize compliance, steering clear of the difficult decision to alter production levels, as both increasing and reducing output appear to be challenging options.