Investing.com - Crude prices have fallen significantly of late, and Citigroup (NYSE:C) sees growing potential for the Brent contract to fall to $60-$65 a barrel over the course of the second half of the year.
At 08:45 ET (13:45 GMT), Brent crude futures rose 0.5% to $75.00 a barrel, but traded 2.5% lower over the last week and down 2.7% over the last month.
“We see Brent oil at $60-65/bbl through 2H’25,” analysis at Citi said, in a note dated Feb. 5. “Non-OPEC+ supply growth is still set to outpace weak (tariff-impacted) global demand growth from 2Q’25 through 4Q’25, with the market shifting into surplus, despite our assumed extension of OPEC+ cuts through year-end and assumed Iranian losses of 200-300-k b/d over the coming months.”
President Trump issued a National Security Presidential Memorandum, announcing its intention to increase economic pressure on Iran, using policy tools such as sanctions and enforcement of existing measures.
However, President Trump’s comments during the press conference suggested a willingness to engage in dialogue with Iran, while President Pezeshkian’s government has also shown interest in diplomatic solutions and sanctions relief.
“We remain strongly of the view that President Trump could ultimately prove to be a bearish influence on the oil market – specifically, Trump has consistently highlighted lower energy prices as the central solution to US inflation, interest rate, debt, and cost of living issues, and that this is a core issue for which he was elected,” Citi said.
Trump’s US energy deregulation drive may be complemented with US oil capex stimulus now that Chris Wright has been confirmed as Energy Secretary (each incremental million barrels would only cost $3.5-5.0bn to fully subsidize), the bank added.