Citi: Trump's US Election Win Could Put Downward Pressure on Crude Oil Prices Until 2568

Citi: Trump's US Election Win Could Put Downward Pressure on Crude Oil Prices Until 2568, Brent Expected to Average $60 a Barrel

On November 7, 2024, Reuters reported that Citi predicted that former U.S. President Donald Trump's second term could put downward pressure on oil prices until 2025, forecasting an average Brent crude price of $60 per barrel, primarily due to potential tariffs and increased oil production.

Citi stated that Trump's influence over OPEC+, the organization of oil exporting countries (OPEC) and its allies led by Russia, could prompt producers to accelerate production cuts, while simultaneously potentially easing geopolitical tensions and releasing some oil back into the market.

Citi said Trump's policies could benefit the industry through potential tax incentives for investment in exploration and manufacturing, and that increases in licensing fees could mitigate the minimum bid costs and federal land rental rates imposed during the Biden era.

Furthermore, Trump's policies could have a mixed impact on global economic growth, particularly negatively affecting Europe and China, which remain vulnerable to trade tariffs. This could further impact global oil demand growth, creating a downside risk to global oil demand growth forecasts.

After Trump regained the White House in a landslide victory on Wednesday, Brent crude futures fell 61 cents, or 0.8%, to $74.92 a barrel, while US West Texas Intermediate (WTI) crude fell 30 cents, or 0.4%, to $71.69 a barrel.

Reference: reuters.com

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