The price of a barrel of oil is predicted to slump to $60 by the end of next year due to a surge in production, according to City analysts.
A note from Citigroup analysts indicated that increased production by the OPEC+ cartel will create a market surplus of 2.5 million barrels per day by next September.
The bank forecasts that Brent crude, the international benchmark, will rise to $82 a barrel in three months before dropping in the fourth quarter, eventually reaching $60 next year.
Oil prices have faced pressure after OPEC and its allies announced plans to ramp up production from October, following a period of supply suppression.
Additionally, the International Energy Agency (IEA) predicted a “staggering” surplus in oil supplies of more than 8 million barrels per day by 2030.
Citi analyst Max Layton stated, “Oil balances look exceedingly weighty, with global balances moving into meaningful surplus even if OPEC+ extends all cuts through to end-2025.”
Brent crude recently dropped 0.8% to below $82 a barrel, while US-produced West Texas Intermediate fell 0.9% to below $78.
