Analysts at Citi have given a cautious perspective on the energy sector, flagging persistent risks across oil, gas and refining, whilst questioning any scope for sector outperformance.
The American bank's analysts reckon oil faces a supply overhang that creates downside risk. This 'base-case view' assumes OPEC will act to protect prices, but Citi noted that the balance remains fragile.
European and Asian gas prices may have fallen by around 30% for the whole of 2025, and warned of further downside if demand fails to recover. The refining outlook carries two-way risk, Citi noted, driven in part by the potential reintegration of Russian products into the global system.
The bank is keeping a 'Buy' rating on BP PLC (LSE:BP.), citing Brazil and Russia streams 'remain under-appreciated sources of value'. Citi also retained a 'Buy' rating for ConocoPhillips, saying the discount to Chevron and Exxon Mobil is difficult to ignore, even without a clear catalyst in the offing.