Oil prices dipped on Thursday as Citi Bank forecast further declines for Brent crude, warning that the international benchmark could drop to $60 per barrel in the first quarter of 2026. Analysts cited rising inventories in OECD countries as a key factor expected to weigh on global oil prices.
At the time of writing 10:00 WAT, Brent crude trades at $61.95 per barrel, while West Texas Intermediate (WTI) is at $58.24 per barrel. Murban crude slipped to $62.68, down 1.35%, and natural gas fell 1.28% to $4.536.
Citi’s 2026 outlook: Bearish, base, and bullish scenarios
Citi Bank outlined three scenarios for Brent crude in 2026:
- Bearish scenario: Brent could average $60 per barrel in Q1, with the full year potentially averaging $50 if OPEC+ increases supply, Chinese demand weakens, and geopolitical dealmaking affects the market.
- Base case: Brent may average $62 per barrel across 2026.
- Bullish scenario: Prices could rise to $75 per barrel if geopolitical supply disruptions occur.
Market dynamics and short-term shocks
Earlier this week, oil prices briefly spiked after the United States seized a sanctioned Venezuelan tanker, raising concerns about potential supply disruptions. Venezuela condemned the action, describing it as “international piracy.”
However, analysts warn that the oil market is moving deeper into a glut. ING commodity experts Warren Patterson and Ewa Manthey noted that while Russian seaborne exports remain steady, Urals crude struggles to find buyers and may need to drop in price to attract demand.
Meanwhile, Bloomberg reports indicate that China continues to buy oil aggressively for stockpiling, temporarily offsetting weakening global demand.
Implications for investors
Citi’s forecast highlights a delicate balance in the oil market. Surplus supplies, geopolitical risks, and shifting demand patterns are expected to shape Brent crude’s path in early 2026. Investors and traders will be closely monitoring the first quarter for signals of market direction.