Oil prices are expected to peak this summer before heading toward a steep decline in 2025, say Citi analysts.

"We essentially think ... global inventories will be building a lot next year," Citi's global energy strategist Eric Lee told Yahoo Finance this week.

On Thursday, West Texas Intermediate (CL=F) rose slightly to hover above $82 per barrel, while Brent (BZ=F), the international benchmark price, inched above $85 per barrel.

"We do think that there is a bit of a tight stretch [with supply] through the summer, so we do see prices staying in the low- to mid-80s for a little longer. But as we're looking through the second half of the year into 2025, we really see markets getting a lot weightier," said Lee.

Lee expects Brent to start falling into the $70 range later this year and into the $60 range in 2025.

His prediction comes as oil alliance OPEC+ has said it wants to start phasing out voluntary production cuts. The cartel is facing pressure from member countries to do away with the reductions to avoid losing market share.

"In our base case, we have 1.4 million barrels [of] global oil stock building next year after a roughly balanced market this year," said Lee. "I think when the market sees that, that is bearish for the price."

Lee also forecasts oil demand growth "will continue to slow down" in part due to the electric vehicle transition.

"Oil demand can grow at a slower and slower rate relative to GDP and in fact peak before the end of this decade," said Lee.

Citi is known for its relatively bearish oil forecasts compared to the rest of Wall Street, though other analysts agree prices will likely decline next year.

JPMorgan strategists see Brent averaging $75 next year, sharply down from $83 in 2024.

"Global oil demand growth will likely decelerate from 1.4 mbd this year to 1 mbd in 2025 as the last phase of the post-pandemic rebound dissipates and advancing energy efficiencies and an expanding electric vehicle fleet gain ground," Natasha Kaneva, head of global commodities strategy at JPMorgan, said in a recent note.

Meanwhile, Goldman Sachs forecasts Brent will average $84 this year after a supply squeeze this summer. The firm's analysts forecast the international benchmark to average $82 in 2025.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.

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