Citigroup cuts price target on U.S.-based oil and gas companies as challenges for the energy sector carry over into 2025
Brokerage sees no scope for OPEC+ to reverse production cuts in 2025, leaving an est. 8 mln barrels per day (mbpd) of global oil market capacity on the sidelines
Says “while we expect OPEC+ to stick to its current strategy and keep this oil out of the market, capacity excess means there is neither need for commodity price nor asset price (equities) inflation”
“2025 shouldn’t look any different – the oil market will still be in overcapacity – unless the sector finds valuation support” – Citigroup adds
However, brokerage upgrades oil major Chevron to “buy” from “neutral” and raises PT to $185 from $145; sees upside from Hess merger arbitration in 2025