Fuel bills for drivers may decrease in the coming months, as a prominent Wall Street bank anticipates that Brent crude prices will drop by over 20% to around $70 next year.
Upon market opening in London, the worldwide oil standard dipped by over 3% due to predictions by Citi analysts that its price would decrease from the current $92 a barrel. However, there has been a 0.4% increase since then.
Global governments and central banks were concerned about oil prices nearing $100 a barrel, as this could lead to inflation.
Since mid-June, prices surged by over 25% following Russia and Saudi Arabia’s decision to reduce worldwide supplies. Nonetheless, Citi analysts forecast that Brent crude will plummet to as low as $70 a barrel next year due to an expected surplus in the global market.
Ed Morse, the global head of commodities research at the bank, expects prices to stabilize at an average of $73 in the next year’s second quarter.
He commented that while the pandemic recovery is slowing down, which is impacting demand, there’s increasing supply from non-Opec+ sources.
Morse noted that reductions in supply have contributed to a sustained upward trend in oil prices. However, he believes prices will decrease in the final quarter of this year, with potential further reductions in 2024.
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