Despite Saudi Arabia's Energy Minister's criticism of Goldman Sachs' bearish report, Wall Street's major banks are becoming increasingly pessimistic about the oil market outlook.

Citigroup states that due to the popularization of electric vehicles and higher energy efficiency leading to weak demand for oil, the oil market will be "significantly excessive", and coupled with the growth of oil production in non-OPEC+ countries, oil prices may plummet by 2025.

According to the bank's situation, the price of global benchmark Brent crude oil will begin to fall from the fourth quarter of 2024 and then stabilize at $60 per barrel in 2025 because world oil inventories will increase by 1.4 million barrels per day next year.

OPEC+ recently announced plans to gradually restore production by 2.5 million barrels per day from October 2024 to September 2025. Citigroup analysts said in a report on Wednesday that even if OPEC+ completely cancels this plan, the market will still experience a surplus of 900,000 barrels per day.

This is because global oil production is projected to increase at a steady rate of 1.8 million barrels per day by 2025, far beyond the slow growth in demand of 900,000 barrels per day, driven by North America, Brazil and Guyana. Citigroup analysts said, "Slowing demand growth reflects improvements in energy efficiency and the increase in electric vehicles. Assuming supply is uninterrupted, it seems difficult for OPEC+ to bring their idle capacity back to the market while maintaining high oil prices."

According to Citigroup's situation, the specific timing of OPEC+'s capacity restoration will be postponed to mid-2025. If the group adheres to its announced plan, the oil market will see a surplus of 2.6 million barrels or more. In the bank's most pessimistic scenario, the Brent crude oil price could fall below $50 per barrel before the end of next year.

Citigroup pointed out that due to geopolitical conflicts and oversupply factors, Brent crude oil futures prices are expected to remain at $82 per barrel in the third quarter, then begin to decline, and further pressure in next year. Citigroup advises investors to hedge against downward risks in oil prices and consider any short-term price increases as an opportunity to build bearish positions.

Not only Citigroup sees trouble ahead. Deutsche Bank analyst Michael Hsueh said that OPEC+'s production increase plan will cast a bearish shadow over the next two years. Hsueh said, "Can the market absorb nearly 2.5 million barrels per day of oil? This is incredible."

Deutsche Bank expects that if OPEC+ fully implements its plan, Brent will fall below $60 per barrel. However, the bank expects OPEC+ to increase production more modestly, and Brent will drop to $75 per barrel by the end of 2025.

Tudor, Pickering, Holt & Co. also said that if OPEC+ continues to increase production, the "oil market fundamentals may quickly start to deteriorate" in 2025.

On Wednesday, the IEA also warned that the world will be awash with oil by 2030, with capacity expected to exceed demand projections by 8 million barrels. According to IEA data, this will lead to idle capacity levels that can only be seen during the peak of the COVID-19 pandemic, and will have significant implications for OPEC member countries and the U.S. shale industry.