Wall Street predicted a big surge for oil this year. But prices are now lower
Oil prices were rattled by the collapse of several U.S. and European lenders earlier this spring, which discouraged volatility-adverse investors from historically riskier assets, such as commodities.
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A surprise decision by several OPEC+ producers to voluntarily cut output earlier this month had pushed analyst oil price forecasts near $100 per barrel, but stagnating prices now point to a deepening divide between macroeconomic sentiment and supply-demand fundamentals.
Oil prices have once again lulled near the $80 per barrel threshold, nearly revisiting territory walked in early April, before members of the OPEC+ coalition announced a unilateral cut totaling 1.6 million barrels per day until the end of the year.
The production declines prompted some analysts to warn prices could surge to triple digits, with Goldman Sachs adjusting its Brent forecast up by $5 per barrel to $95 per barrel for December 2023.
Analysts now flag that broader financial turmoil has so far obstructed this bullish outlook, as supply-demand factors are outweighed by recessionary concerns.
“Oil markets have completely faded the boost from the surprise OPEC+ cut earlier this month, and we think this primarily reflects deep pessimism about the macro outlook, with little evidence of incremental weakness in demand so far,” Barclays analysts said in a Wednesday note.
“Weaker refining margins and freight demand have been in focus recently, but we believe markets might be reading too much into the implications of these trends for the demand outlook. We also think that markets might be underestimating OPEC+’s resolve to keep the inventory situation in check.”
“People really bet on a China reopening,” Helima Croft, managing director and global head of commodity strategy at RBC Capital Markets, told CNBC’s “Squawk Box” on Wednesday.
Beijing, the world’s largest importer of crude oil, reined in its purchases last year amid drastic “zero-Covid” restrictions that depressed transport fuel requirements. China has been progressively lifting its pandemic measures since the end of last year, and local crude oil demand is returning — but at a more “muted” pace, Croft noted.
“And the issue of the Fed is real. I think that is something that a lot of us got wrong in terms of the impact of, you know, the rate hikes, recession concerns,” she added.
“We have these OPEC cuts in place, we do have, you know, again, strong demand in India, China is reopening — this should be set up for a bullish story. People are still optimistic about the back half of the year, but the question is, can you get through the big macro wall of worry?”
Viktor Katona, lead crude analyst at Kpler, told CNBC by e-mail that oil prices have suffered from a “constant barrage of gloomy macroeconomic news that creates a negative sentiment background,” as well as market distrust in the implementation of the OPEC+ production cuts. Market participants often wait for a visible reflection — such as lower export rates — to factor in production cuts, which can create a disconnect when vessel loadings arise from stock inventories.
But Katona projected price-supportive tightness in the physical markets over the summer season:
“We still see July and August as being the tightest months of 2023, with demand surpassing supply by some 2 million b/d (barrels per day), so the overall direction is still the same,” he said, noting that, globally, consumers will be exiting their annual refinery maintenance periods that curb their intake by that time.
“Net length in crude futures contracts has fully recovered from the banking panic seen in March and net length in WTI is the highest since November 2022, so the belief that prices are to increase is definitely widely shared by the market.”
But China’s long-anticipated reopening may prove too little, too late. One trade source — who could only comment on condition of anonymity because of contractual obligations — said the market is waiting for concrete signs of physical inventory draws. Another pointed to generally poor refining margins in Asia and a “poor demand cycle.” Another said that China’s reopening has been fully factored into the current pricing, and Beijing’s needs are simply being met by Russian oil. Moscow has rerouted 20% of the oil it supplied to Europe to other markets such as Asia, Russian Deputy Prime Minister Alexander Novak said Wednesday, in comments reported by Reuters.
Kpler data indicates that China’s imports of Russian crude oil averaged 1.59 million barrels per day in March, up 68% from the same period in 2022. Croft says that Chinese buyers have been “beneficiaries of sanctions policies,” as Moscow’s slashed prices also pushed other sanctioned sellers, such as Venezuela and Iran, to discount their crude.
OPEC+ weight
Oil prices were rattled by the collapse of several U.S. and European lenders earlier this spring, which discouraged volatility-adverse investors from historically riskier assets, such as commodities.
OPEC+ sources told CNBC at the time that these sentiment-driven fears would likely be temporary and pushed aside by supply-demand realities. The group convenes to discuss policy at a ministerial level for one of two annual meetings in June — when Croft flags that Gulf producers will likely set the agenda.
“When you think about Russia, Russia makes involuntary cuts. They basically rebrand the sanctions problem as a production cut. It’s really a question, I think, right now, about Saudi Arabia and the other Gulf producers, what they want to do. Again, Russia’s happy to have anything that raises prices, but they’re not in the driver’s seat.”
The weight of OPEC+ co-chair Russia within the group has been stifled by Western sanctions against its crude oil and oil product imports, in place since December and February, respectively.
As markets settle near $80 per barrel, Croft questioned what recourses still remain in the OPEC+ arsenal. “The question is right now, do they have more bullets to play, as we go into a June meeting?”
The latest cuts already spell a tight supply-demand balance that could hit households, the International Energy Agency warned in its latest monthly Oil Market Report.
“Our oil market balances were already set to tighten in the second half of 2023, with the potential for a substantial supply deficit to emerge. The latest cuts risk exacerbating those strains, pushing both crude and product prices higher. Consumers currently under siege from inflation will suffer even more from higher prices, especially in emerging and developing economies,” it said.
Biden’s bid
Historically a defender of curbing prices at the pump, the U.S. has repeatedly called on OPEC+ producers to lift supplies, waging a war of words with group Chair Saudi Arabia when the coalition instead opted for a 2 million barrels per day cut in October. The U.S.’ own shale production, “traditionally the most price-responsive source of more output, is currently limited by supply chain bottlenecks and higher costs,” the IEA warns.
Throughout Biden’s presidency, U.S. energy policy has been defined by a push toward climate awareness. Shortly after taking office, the head of state suspended new oil and natural gas leases on public lands and waters and kicked off a thorough review of existing permits for fossil fuel development. Biden has openly criticized the oil sector for raking in profit at the expense of consumers, in June last year claiming ExxonMobil “made more money than God.”
But crude oil supply shortages and soaring gasoline prices have pushed Biden — who on Tuesday announced his re-election campaign — to reconsider his tactic, Croft holds.
“You have President Biden coming into office, essentially saying, Keep the oil in the ground. And now when he is faced with higher retail gasoline prices, essentially they say to oil companies, no, put the money in the ground. So we have seen a significant pivot on oil policy from the Biden administration,” she said Wednesday.
“That said, the fully robust defense of the American oil and gas is usually on the Republican end of the House.”
After years of teasing that other automakers would license Tesla’s Full Self-Driving (FSD) system, Elon Musk has now admitted that no other automakers want to license it.
“They don’t want it!” He says.
For years, the bull case for Tesla (TSLA) has relied heavily on the idea that the company isn’t just an automaker, but an “AI and robotics company”, with its first robot product being an autonomous car.
CEO Elon Musk pushed the theory further, arguing that Tesla’s lead in autonomy was so great that legacy automakers would eventually have no choice but to license Full Self-Driving (FSD) to survive.
Back in early 2021, during the Q4 2020 earnings call, Musk first claimed that Tesla had “preliminary discussions” with other automakers about licensing the software. He reiterated this “openness” frequently, famously tweeting in June 2023 that Tesla was “happy to license Autopilot/FSD or other Tesla technology” to competitors.
The speculation peaked in April 2024, when Musk explicitly stated that Tesla was “in talks with one major automaker” and that there was a “good chance” a deal would be signed that year.
We now know that deal never happened. And thanks to comments from Ford CEO Jim Farley earlier this year, we have a good idea why. Farley, who was likely the other party in those “major automaker” talks, publicly shut down the idea of using FSD, stating clearly that “Waymo is better”.
Now, Musk appears to have given up on the idea of licensing Tesla FSD. In a post on X late last night, Musk acknowledged that discussions with other automakers have stalled, claiming that they asked for “unworkable requirements” for Tesla.
The CEO wrote:
“I’ve tried to warn them and even offered to license Tesla FSD, but they don’t want it! Crazy …
When legacy auto does occasionally reach out, they tepidly discuss implementing FSD for a tiny program in 5 years with unworkable requirements for Tesla, so pointless.”
Suppose you translate “unworkable requirements” from Musk-speak to automotive industry standard. In that case, it becomes clear what happened: automakers demanded a system that does what it says: drive autonomously, which means something different for Tesla.
Legacy automakers generally follow a “V-model” of validation. They define requirements, test rigorously, and validate safety before release. When Mercedes-Benz released its Drive Pilot system, a true Level 3 system, they accepted full legal liability for the car when the system is engaged.
In contrast, Tesla’s “aggressive deployment” strategy relies on releasing “beta” (now “Supervised”) software to customers and using them to validate the system. This approach has led to a litany of federal investigations and lawsuits.
Just this month, Tesla settled the James Tran vs. Tesla lawsuit just days before trial. The case involved a Model Y on Autopilot crashing into a stationary police vehicle, a known issue with Tesla’s system for years. By settling, Tesla avoided a jury verdict, but the message to the industry was clear: even Tesla knows it risks losing these cases in court.
Meanwhile, major automakers, such as Toyota, have partnered with Waymo to integrate its autonomous driving techonology into its consumer vehicles.
Electrek’s Take
The “unworkable requirements for Tesla” is an instant Musk classic. What were those requirements that were unachievable for Tesla? That it wouldn’t crash into stationary objects on the highway, such as emergency vehicles?
How dare they request something that crazy?
No Ford or GM executive is going to license a software stack that brings that kind of liability into their house. If they license FSD, they want Tesla to indemnify them against crashes. Tesla, knowing the current limitations of its vision-only system, likely refused.
To Musk, asking him to pay for FSD’s mistakes is an “unworkable requirement.” It’s always a driver error, and the fact that he always uses hyperbole to describe the level of safety being higher than that of humans has no impact on user abuse of the poorly named driver assistance systems in his view.
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Environment
CPSC warns Rad Power Bikes owners to stop using select batteries immediately due to fire risk
In an unprecedented move, the US Consumer Product Safety Commission (CPSC) has issued a public safety warning urging owners of certain Rad Power Bikes e-bike batteries to immediately stop using them, citing a risk of fire, explosion, and potentially serious injury or death.
The warning, published today, targets Rad’s lithium-ion battery models RP-1304 and HL-RP-S1304, which were sold with some of the company’s most popular e-bikes, including the RadWagon 4, RadRunner 1 and 2, RadRunner Plus, RadExpand 5, RadRover 5 series, and RadCity 3 and 4 models. Replacement batteries sold separately are also included.
According to the CPSC, the batteries “can unexpectedly ignite and explode,” particularly when exposed to water or debris. The agency says it has documented 31 fires linked to the batteries so far, including 12 incidents of property damage totaling over $734,000. Alarmingly, several fires occurred when the battery wasn’t charging or when the bike wasn’t even in use.
Complicating the situation further, Rad Power Bikes – already facing significant financial turmoil – has “refused to agree to an acceptable recall,” according to the CPSC. The company reportedly told regulators it cannot afford to replace or refund the large number of affected batteries. Rad previously informed employees that it could be forced to shut down permanently in January if it cannot secure new funding, barely two weeks before this safety notice was issued by the CPSC.
For its part, Rad pushed back strongly on the CPSC’s characterization. A Rad Power Bikes Spokesperson explained in a statement to Electrek that the company “stands behind our batteries and our reputation as leaders in the ebike industry, and strongly disagrees with the CPSC’s characterization of certain Rad batteries as defective or unsafe.”
The company explained that its products meet or exceed stringent international safety standards, including UL-2271 and UL-2849, which are standards that the CPSC has proposed as a requirement but not yet implemented. Rad says its batteries have been repeatedly tested by reputable third-party labs, including during the CPSC investigation, and that those tests confirmed full compliance. Rad also claims the CPSC did not independently test the batteries using industry-accepted standards, and stresses that the incident rate cited by the agency represents a tiny fraction of a percent. While acknowledging that any fire report is serious, Rad maintains that lithium-ion batteries across all industries can be hazardous if damaged, improperly used, or exposed to significant water intrusion, and that these universal risks do not indicate a defect specific to Rad’s products.
The company says it entered the process hoping to collaborate with federal regulators to improve safety guidance and rider education, and that it offered multiple compromise solutions – including discounted upgrades to its newer Safe Shield batteries that were a legitimate leap forward in safety in the industry – but the CPSC rejected them. Rad argues that the agency instead demanded a full replacement program that would immediately bankrupt the company, leaving customers without support. It also warns that equating new technology with older products being “unsafe” undermines innovation, noting that the introduction of safer systems, such as anti-lock brakes, doesn’t retroactively deem previous generations faulty. Ultimately, Rad says clear, consistent national standards are needed so manufacturers can operate with confidence while continuing to advance battery safety.
Lithium-ion battery fires have become a growing concern across the US and internationally, with poorly made packs implicated in a rising number of deadly incidents.
While Rad Power Bikes states that no injuries or fatalities have been tied to these specific models, the federal warning marks one of the most serious e-bike battery advisories issued to date – and arrives at a moment when the once-dominant US e-bike brand is already fighting for survival.
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Environment
Rivian’s e-bike brand launches $250 smart helmet with breakthrough safety tech and lights
ALSO, the new micromobility brand spun out of Rivian, just announced official pricing for its long-awaited Alpha Wave helmet. The smart helmet, which introduces a brand-new safety tech called the Release Layer System (RLS), is now listed at $250, with “notify for pre-order” now open on ALSO’s site. Deliveries are expected to begin in spring 2026.
The $250 price point might sound steep, but ALSO is positioning the Alpha Wave as a top-tier lid that undercuts other premium smart helmets with similar tech – some of which push into the $400–500 range. That’s because the Alpha Wave is promising more than just upgraded comfort and design. The company claims the helmet will also deliver a significant leap in rotational impact protection.
The RLS system is made up of four internal panels that are engineered to release on impact, helping dissipate rotational energy – a major factor in many concussions. It’s being marketed as a next-gen alternative to MIPS and similar technologies, and could signal a broader shift in helmet safety standards if adopted widely.
Beyond protection, the Alpha Wave also packs a surprising amount of tech. Four wind-shielded speakers and two noise-canceling microphones are built in for taking calls, playing music, or following navigation prompts. And when paired with ALSO’s own TM-B electric bike, the helmet integrates with the bike’s onboard lighting system for synchronized rear lights and 200-lumen forward visibility.
The helmet is IPX6-rated for water resistance and charges via USB-C, making it easy to keep powered up alongside other modern gear.
Electrek’s Take
This helmet pushes the smart gear envelope. $250 isn’t nothing, but for integrated lighting, audio, and what might be a true leap forward in crash protection, it’s priced to shake things up in the high-end helmet space.
One area I’m not a huge fan of is the paired front and rear lights. Cruiser motorcycles have this same issue, with paired tail lights mounted close together sometimes being mistaken for a conventional four-wheeled vehicle farther away. I worry that the paired “headlights” and “taillights” of this helmet could be mistaken for a car farther down the road instead of the reality of a much closer cyclist. But hey, we’ll have to see.
The tech is pretty cool though, and if the RLS system holds up to its promise, we might be looking at the new bar for premium e-bike head protection.
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