A driver pumps gas at a Sunoco gas station in Washington, DC, US, on Tuesday, Nov. 28, 2023.
Al Drago | Bloomberg | Getty Images
Oil prices are on pace to close out the year about 10% lower as bearish sentiment has taken over due to worries that the market is oversupplied from record production outside OPEC.
The West Texas Intermediate contract for February gained 10 cents, or 0.14%, to trade at $71.87 to barrel on Friday. The Brent contract for March rose 12 cents, or 0.16%, to trade at $77.27.
But U.S. crude and the global benchmark were headed for the first annual decline since 2020 despite ongoing geopolitical risk in the Middle East due to the devastating war in Gaza.
Oil prices rose nearly 3% on Tuesday on worries that militant attacks on shipping in the Red Sea would disrupt global trade and crude supplies. However, WTI is down 10.45% for the year, and Brent has lost 9.9%.
While fears of escalation in the Middle East have triggered brief spikes in crude prices, traders are primarily focused on the supply and demand balance.
Record U.S. production
The U.S. is producing crude at a record pace, pumping an estimated 13.3 million barrels per day last week. Output is also at a record in Brazil and Guyana. The historic production outside OPEC has collided with an economic slowdown in major economies, above all China.
OPEC and its allies, meanwhile, have promised to cut production by 2.2 million barrels per day in the first quarter of 2024, but traders apparently have little confidence that the bloc’s policy will bring the market into balance.
Oil production outside OPEC, above all in the U.S., is expected to more than cover demand growth in 2024, according to the International Energy Agency. Global oil demand growth is expect to fall by half to 1.1 mbd next year, while output outside OPEC is expected grow by 1.2 mbd.
Profound impact on oil
The shift in crude supply from the Middle East to the U.S. and other Atlantic countries is “profoundly impacting the global oil trade,” the IEA said in its December outlook.
The U.S. was responsible for two-thirds of the growth in supply outside OPEC this year. This is challenging efforts by producers in the Middle East to defend their market share and lift oil prices, according to the IEA.
OPEC seems to have little room to maneuver, with production cuts falling on deaf ears. Brazil has agreed to ally itself with the bloc, but it is not clear what that means for markets.
Occidental CEO Vicki Hollub told CNBC in December that U.S. production this year has reached levels that surprised even her. She had a message of caution for the industry.
“It would be prudent of U.S. producers to be careful in terms of putting too much supply in the market,” Hollub said.
The Occidental CEO and Morgan Stanley do see U.S. crude prices bouncing back next year with a barrel of WTI averaging about $80. Wells Fargo has a lower forecast with WTI averaging $71.50 a barrel next year.
Mideast escalation threat
While the market is focused on the supply and demand picture, Helima Croft of RBC Capital Markets told investors to watch developments in the Middle East closely.
“Anything that brings more direct confrontation with Iran and the United States is what you have to watch,” Croft said Friday on CNBC’s “Squawk Box.”
Three U.S. troops were injured Monday in a drone attack in Iraq carried out by Iran-backed militants. President Joe Biden then ordered retaliatory strikes on militia sites. And attacks by Iran-backed militants in Yemen on vessels in the Red Sea caused global shipping companies to reroute some traffic from the Suez Canal around the Cape of Good Hope in Africa.
The situation is also escalating on Israel’s northern border with Lebanon. Israel Defense Minister Yoav Gallant said Tuesday that his country is facing a “multiarena war” from seven areas: Gaza, the West Bank, Iran, Iraq, Lebanon, Syria and Yemen.
“If you look at the situation in the Middle East, I think it is far too soon to write off the risks there,” RBC’s Croft said.
The new John Deere Z370RS Electric ZTrak zero turn electric riding mower promises all the power and performance Deere’s customers have come to expect from its quiet, maintenance-free electric offerings – but with an all new twist: removable batteries.
The latest residential ZT electric mower from John Deere features a 42″ AccelDeep mower deck for broad, capable cuts through up to 1.25 acres of lawn per charge, which is about what you’d expect from the current generation of battery-powered Deeres – but this is where the new Z370RS Electric ZTrak comes into its own.
Flip the lid behind the comfortably padded yellow seat and you’ll be greeted by six (6!) 56V ARC Lithium batteries from electric outdoor brand EGO. Those removable batteries can be swapped out of the Z370RS for fresh ones in seconds, getting you back to work in less time than it takes to gravity pour a tank of gas.
When John Deere launched the first Z370R, Peter Johnson wrote that electrifying lawn equipment needs to be a priority, citing EPA data that showed gas-powered lawnmowers making up five percent of the total air pollution in the US (despite covering far less than 5% of the total miles driven on that gas). “Moreover,” he writes, “it takes about 800 million gallons of gasoline each year (with an additional 17 million gallons spilled) to fuel this equipment.”
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Daimler Truck AG CEO Karin Rådström hopped on LinkedIn today and dropped some absolutely wild pro-hydrogen talking points, using words like “emotional” and “inspiring” while making some pretty heady claims about the viability and economics of hydrogen. The rant is doubly embarrassing for another reason: the company’s hydrogen trucks are more than 100 million miles behind Volvo’s electric semis.
UPDATE 22NOV2025: Daimler just delivered five new hydrogen semis for trials.
While it might be hard to imagine why a company as seemingly smart as Daimler Truck AG continues to invest in hydrogen when study after study has shut down its viability as a transport fuel, it makes sense when you consider that the Kuwait Investment Authority (KIA) holds approximately 5% of Daimler and parent company Mercedes’ shares.
That’s not a trivial stake. Indeed, 5% is enough to make KIA one of the few actors with both the access and the motivation to shape conversations about Daimler’s long-term technology bets, and as a major oil-producing country whose economy would undoubtedly take a hit if oil demand plummeted, any future fuel that’s measured molecules instead of electrons isn’t just a concept for the Kuwaiti economy: it’s a lifeline.
In that context, the push to make hydrogen seem like an attractive decarbonization option makes more sense. So, instead of giving Daimler’s hydrogen propaganda team yet another platform to try and convince people that hydrogen might make for a viable transport fuel eventually by giving five Mercedes-Benz GenH2 semi trucks to its customers at Hornbach, Reber Logistik, Teva Germany with its brand ratiopharm, Rhenus, and DHL Supply Chain, I’m just going to re-post Daimler CEO Karin Rådström’s comments from Hydrogen Week.
For some reason – posts about hydrogen always stir up emotions. I think hydrogen (not “instead of” but “in parallel to” electric) plays a role in the decarbonization of heavy duty transport in Europe for three reasons:
If we would go “electric only” we need to get the electric grid to a level where we can build enough charging stations for the 6 million trucks in Europe. It will take many years and be incredibly expensive. A hydrogen infrastructure in parallel will be less expensive and you don’t need a grid connection to build it, putting 2000 H2 stations in Europe is relatively easy.
Europe will rely on import of energy, and it could be transported into Europe from North Africa and Middle East as liquid hydrogen. Better to use that directly as fuel than to make electricity out of it.
Some use cases of our customers are better suited for fuel cells than electric trucks – the fuel cell truck will allow higher payload and longer ranges.
At European Hydrogen Week, I saw firsthand the energy and ambition behind Europe’s net-zero goals. It’s inspiring—but also a wake-up call. We’re not moving fast enough.
What we need:
Large-scale hydrogen production and transport to Europe
A robust refueling network that goes beyond AFIR
And real political support to make it happen – we need smart, efficient regulation that clears the path instead of adding hurdles.
To show what’s possible, we brought our Mercedes-Benz GenH2 to Brussels. From the end of 2026, we’ll deploy a small series of 100 fuel cell trucks to customers.
Let’s build the infrastructure, the momentum, and the partnerships to make zero-emission transport a reality. 🚛 and let’s try to avoid some of the mistakes that we see now while scaling up electric. And let’s stop the debate about “either or”. We need both.
Daimler CEO at European Hydrogen Week; via LinkedIn.
At the risk of sounding “emotional,” Rådström’s claims that building a hydrogen infrastructure in parallel will be less expensive than building an electrical infrastructure, and that “you don’t need a grid connection to build it,” are objectively false.
Next, the claim that, “Europe will rely on import of energy, and it could be transported into Europe from North Africa and Middle East as liquid hydrogen” (emphasis mine), is similarly dubious – especially when faced with the fact that, in 2023, wind and solar already supplied about 27–30% of EU electricity.
Unless, of course, Mercedes’ solid-state batteries don’t work (and she would know more about that than I would, as a mere blogger).
Electrek’s Take
Via Mahle.
As you can imagine, the Karin Rådström post generated quite a few comments at the Electrek watercooler. “Insane to claim that building hydrogen stations would be cheaper than building chargers,” said one fellow writer. “I’m fine with hydrogen for long haul heavy duty, but lying to get us there is idiotic.”
Another comment I liked said, “(Rådström) says that chargers need to be on the grid – you already have a grid, and it’s everywhere!”
At the end of the day, I have to echo the words of one of Mercedes’ storied engineering partners and OEM suppliers, Mahle, whose Chairman, Arnd Franz, who that building out a hydrogen infrastructure won’t be possible without “blue” H made from fossil fuels as recently as last April, and maybe that’s what this is all about: fossil fuel vehicles are where Daimler makes its biggest profits (for now), and muddying the waters and playing up this idea that we’re in some sort of “messy middle” transition makes it just easy enough for a reluctant fleet manager to say, “maybe next time” when it comes to EVs.
We, and the planet, will suffer for such cowardice – but maybe that’s too much malicious intent to ascribe to Ms. Rådström. Maybe this is just a simple “Hanlon’s razor” scenario and there’s nothing much else to read into it.
Let us know what you think of Rådström’s pro-hydrogen comments, and whether or not Daimler’s shareholders should be concerned about the quality of the research behind their CEO’s public posts, in the comments section at the bottom of the page.
SOURCE | IMAGES: Karin Rådström, via LinkedIn.
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Audi embraced its future in China with the launch of a new Chinese market electric sub-brand called AUDI that ditched the iconic “four rings” logo in favor of four capital letters – but one thing this latest concept hasn’t ditched is the brand’s traditionally teutonic long-roof design language.
Co-developed with Audi’s Chinese production partner, SAIC, the all-new AUDI E SUV concept is based on the PPE (Premium Platform Electric) skateboard, and is only the second model introduced by the company’s domestic sub-brand — which was all-new itself just one year ago.
“The AUDI E SUV concept celebrates the new AUDI brand’s first anniversary following the E concept’s debut in Guangzhou (2024),” said Fermín Soneira, CEO of the Audi and SAIC cooperation, at the E SUV’s unveiling. “It showcases an unmistakable AUDI design language that gives the SUV a prestigious, progressive stance — with no compromise between sporty aesthetics and interior roominess or versatility. This concept embodies our vision for premium electric mobility by fusing Audi’s engineering heritage with digital innovation to fulfill our commitment in China.”
As a vehicle, the AUDI E SUV concept promises to handle “like an Audi,” and is powered by a pair of electric motors good for a combined 500 kW (~670 hp), good enough to get the big crossover from 0-100 km/h (62 mph) in about five seconds. Those efficient motors are fed electrons by a 109 kWh battery riding on AUDI’s 800V Advanced Digital Platform system architecture, and can allegedly add 320 km (~200 miles) of range in under 10 minutes at a high-powered DC fast charging station.
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If you’re a fan of self-driving tech, the AUDI 360 Driving Assist System is the AUDI E SUV concept is for you, with features that, “enable a relaxed and safe driving experience – on highways, in dense city traffic, and during assisted parking.”
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Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
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