Oil prices to crash below $70 a barrel by 2024: Citi Group

October 02, 2023 (MLN): Brent Crude, the major oil benchmark, is expected to drop to $70 a barrel by 2024 as the global market is expected to swing to surplus by next year, according to Citigroup's latest predictions.

The shift reflects “more oil coming into the market,” analysts including Ed Morse said in a quarterly report, as Bloomberg reported.

“Higher prices in the near term could make for more downside for prices next year,” the Citi analysts said.

There’s a lot of support for oil prices and the market will continue to tighten, Halliburton Co. Chief Executive Officer Jeff Miller said in a Bloomberg TV interview at the Adipec conference.

The Organization of Petroleum Exporting Countries and its allies are unlikely to deepen their production cuts, Eni SpA CEO Claudio Descalzi said in a Bloomberg TV interview.

OPEC+ in its meeting held on September 05 decided to prolong their voluntary supply cuts to the end of the year, raising concerns among investors about potential shortages during the peak winter demand.

It is important to mention that oil prices extended their upward trajectory for the fourth straight month in September as the market continued to weigh on OPEC+'s decision to extend supply cuts to the end of the year.

Brent crude and WTI are currently trading at $91.99 and $89.93 up by 0.28% and 0.15% respectively compared to the previous close.

Ministers and oil industry chiefs are gathering for the biggest energy conference in the Middle East as crude heads toward $100 a barrel.

Whether prices can hold at these levels and the outlook for OPEC+ supply cuts are among topics that will be discussed from Monday.

But this year, the climate is looming large over the forum.

Delegates at the annual Adipec summit in Abu Dhabi, which has been dominated by oil in its long-running history, will devote a lot of their time to the energy transition.

The meeting comes just two months ahead of the United Arab Emirates also hosting the crucial COP28 conference.

Chief executive officers of Shell Plc, TotalEnergies SE, and Occidental Petroleum Corp., among others, will later Monday discuss plans for the energy transition. UAE Energy Minister Suhail Al Mazrouei and OPEC Secretary-General Haitham al-Ghais are also scheduled to speak.

A lack of investments in projects is the main issue for oil, while demand remains strong, Descalzi said.

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