Sept 4 Reuters If producer group OPEC doesn39;t reduce production further, the average price of oil could drop to 60 per barrel in 2025 due to reduced demand and increased supply from nonOPEC countries, Citi said in a note on Wednesday.

Citi said that while a technical rebound was possible, the market could lose confidence in OPEC defending the 70bbl level if the group doesn39;t commit to extending current output cuts indefinitely.

If Brent prices fall into the 60s, financial flows could drive them down further, possibly to 50 per barrel before a potential rebound, the analysts at Citi said.

Geopolitical tensions were initially expected to lift oil prices, but each rebound since October 2023 has weakened, Citi said. It added that the market now recognises that tensions dont necessarily lead to reduced production or transit issues, making rallies an opportunity to sell.

Libya39;s recent production return and expectations that the disruption there will be shortlived, given the lack of ongoing hostilities, have led some market participants to resume shorting oil, it said.

Citi recommends selling into rallies when Brent approaches 80, given the current market dynamics.

Goldman Sachs last week responded to this shifting outlook by cutting its average 2025 Brent forecast and price range by 5 per barrel, citing slower demand in China.

In contrast, UBS expects Brent to rise above 80bbl over the coming months, arguing that the oil market remains undersupplied despite weak…