Analysts at Citi predict a potential surge in Brent crude oil prices in the fourth quarter as demand may surpass supply, leading to a market deficit of 0.4 million barrels per day. This trend could push prices to the $70 to $75 per barrel range in the near-term.

The decision by OPEC and its allies to delay output cuts, combined with supply disruptions in Libya, are expected to contribute to the looming deficit. Additionally, a rebound in demand from China could further boost the benchmark.

However, Citi analysts caution that price weakness is anticipated in 2025, with Brent possibly dropping to $60 per barrel due to a projected surplus of one million barrels per day.

On Thursday, crude prices edged higher following a substantial interest rate cut by the US Federal Reserve. Despite concerns over global demand, Brent rose by 0.9% to $74.34 per barrel, while WTI futures traded 1.0% higher at $70.58 per barrel.

The Fed’s rate cut aimed to stimulate economic activity, but raised worries about a potential slowdown in growth. Fed Chair Jerome Powell reassured markets but emphasized that interest rates would remain higher in the medium-to-long term.

US government data showed a larger-than-expected draw in inventories, attributed to lower imports and production, as well as the impact of Hurricane Francine on offshore oil output. However, builds in distillates and gasoline inventories raised concerns about cooling fuel demand.

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