Citi lowers its forecasts for Brent crude oil prices by $4 as the risk premium declines.

The American financial group Citi Group published a memo on the oil market on Monday, where the group's analytical company lowered its forecasts for crude oil prices following recent geopolitical developments in the Middle East.

According to Citi Group's memo today, the average price of Brent crude is expected to reach $70 per barrel during the fourth quarter of the year, down from previous forecasts of $74 per barrel. The company attributed this significant reduction in oil price forecasts to the decline in the geopolitical risk premium in the near term.

Citi Group analysts stated in the memo published for clients that it is unlikely that the oil market will now view Israel's recent military actions as likely to escalate the conflict in the Middle East to a degree that would affect oil supplies from the region.

As for its oil price forecasts for next year, Citi Group confirmed that it still expects the average price of Brent crude to be $65 per barrel in the first quarter and $60 per barrel in the second quarter, as OPEC+ is expected to make scheduled production adjustments.

Citi Group's new forecasts come at a time when futures prices for Brent crude are trading down about 5.1% at $71.72 per barrel, while West Texas Intermediate crude futures are trading down 5.3% at $67.89 per barrel.