In the latest Oil Monitor report from Bank of America, a notable decline in oil prices is attributed to shifting market dynamics, with geopolitical concerns taking a back seat to supply-side factors.

According to Citi's analysis, the market's perception of geopolitical risks in the Middle East has softened, leading to downward pressure on prices, which briefly dipped below $82 per barrel. Despite ongoing tensions in the region, the focus has shifted towards looser fundamentals.

"The market's perception of the impact on global oil supply of geopolitical developments in the Middle East moderated, with risk premia in the OTM options also compressing, putting crude oil prices under intense downside pressure," the bank wrote.

Citi's base case scenario anticipates a gradual easing of oil prices throughout 2024, with projections of $86 per barrel in the second quarter and $74 per barrel in the third quarter. Despite the recent decline, Citi cautions against speculative buying, advising investors to capitalize on any rallies by selling.

"With crude oil prices now trading over $10/bbl off their highs, we could not rule out some speculative buying, but still believe the right strategy in this balance between geopolitical risks and loosening fundamentals is to sell any rally," they explained.