Oil could plunge to $40 in 2025 if OPEC unwinds voluntary production cuts, analysts say
A pump jack in Midland, Texas, US, on Thursday, Oct. 3, 2024.
Anthony Prieto | Bloomberg | Getty Images
Oil prices may see a drastic fall in the event that oil alliance OPEC+ unwinds its existing output cuts, said market watchers who are predicting a bearish year ahead for crude.
“There is more fear about 2025’s oil prices than there has been since years — any year I can remember, since the Arab Spring,” said Tom Kloza, global head of energy analysis at OPIS, an oil price reporting agency.
“You could get down to $30 or $40 a barrel if OPEC unwound and didn’t have any kind of real agreement to rein in production. They’ve seen their market share really dwindle through the years,” Kloza added.
A decline to $40 a barrel would mean around a 40% erasure of current crude prices. Global benchmark Brent is currently trading at $72 a barrel, while U.S. West Texas Intermediate futures are around $68 per barrel.
Oil prices year-to-date
Given that oil demand growth next year probably won’t be much more than 1 million barrels a day, a full unwinding of OPEC+ supply cuts in 2025 would “undoubtedly see a very steep slide in crude prices, possibly toward $40 a barrel,” Henning Gloystein, head of energy, climate and resources at Eurasia Group, told CNBC.
Similarly, MST Marquee’s senior energy analyst Saul Kavonic posited that should OPEC+ unwind cuts without regard to demand, it would “effectively amount to a price war over market share that could send oil to lows not seen since Covid.”
However, the alliance is more likely to opt for a gradual unwinding early next year, compared to a full scale and immediate one, the analysts said.
Should the producers group proceed with their production plan, the market surplus could nearly double.
Martoccia Francesco
Energy strategist at Citi
The oil cartel has been exercising discipline in maintaining its voluntary output cuts, to the point of extending them.
In September, OPEC+ postponed plans to begin gradually rolling back on the 2.2 million barrels per day of voluntary cuts by two months in an effort to stem the slide of oil prices. The 2.2 million bpd cut, which was implemented over the second and third quarters, had been due to expire at the end of September.
At the start of this month, the oil cartel again decided to delay the planned oil output increase by another month to the end of December.
Oil prices have been weighed by a sluggish post-Covid recovery in demand from China, the world’s second-largest economy and leading crude oil importer. In its monthly report released Tuesday, OPEC lowered its 2025 global oil demand growth forecast from 1.6 million barrels per day to 1.5 million barrels per day.
The pressured prices were also conflagrated by a perceivably oversupplied market, especially as key oil producers outside the OPEC alliance like the U.S., Canada, Guyana and Brazil are also planning to add supply, Gloystein highlighted.
Bearish year ahead for oil
The market consensus is that there’ll be a “substantial” oil stock build next year, said Citibank energy strategist Martoccia Francesco.
“Should the producers group proceed with their production plan, the market surplus could nearly double… reaching as much as 1.6 million barrels per day,” said Francesco.
Even if OPEC+ doesn’t unwind the cuts, the future ofl prices is still looking break. Citi analysts expect Brent price to average $60 per barrel next year.
Further fueling the bearish outlook is the incoming administration of U.S. President-elect Donald Trump, whose return is associated by some with a potential trade war, said analysts who spoke to CNBC.
“If we do get a trade war — and a lot of economists think that a trade war is possible, and particularly against China — we could see much, much lower prices,” said OPIS’ Kloza.
Trump has also touted a “drill baby drill” policy for U.S. producers, vowing to cut energy prices in half.
For that to happen to retail gasoline prices, oil would need to drop to “below $40” per barrel, said Matt Smith, Kpler’s lead oil analyst.
Right now, retail gasoline prices are at a “sweet spot” at $3 per gallon, where consumers do not feel the pinch and input prices are still sufficiently high for producers, Smith added.
Environment
Ford F-150 Lightning sales have been falling for months: What’s going on with the EV pickup?
Is Ford’s electric pickup in trouble? Sales have been down for months, and February showed no relief. What’s going on with the Ford F-150 Lightning?
Ford F-150 Lightning sales drop again in February 2025
Ford’s US sales dropped by 9% last month. Although electrified vehicles, including EVs and hybrids, both notched double-digit growth, sales of Ford’s gas-powered (ICE) models, which accounted for over 85% of deliveries, fell nearly 13%.
Hybrids saw higher demand with sales up 27.5% to 15,357, while EV sales increased 15% to 7,326. The Mustang Mach-E was a bright spot with 3,312 models sold in February, up 13% from the prior year.
With 6,841 Mach-Es sold through the first three months of 2025, Ford’s electric crossover SUV remains a top-selling EV in the US.
Ford’s electric pickup didn’t fare as well. F-150 Lightning Sales were down nearly 15% last month with only 2,199 units sold. Through March, Ford has sold 15% fewer Lightning models than it did at this time last year.
Sales of the electric pickup have been slipping for months now. In the final three months of 2024, F-150 Lightning sales were down 10%.
The Lightning, alongside Rivian’s R1T, are no longer the only electric pickups on the market. Ford is facing new competition with the Tesla Cybertruck, Chevy Silverado EV, and GMC Sierra EV, arriving.
According to Cox Automotive, the Tesla Cybertruck slipped past the Lightning to become the fifth best-selling EV in the US last year with nearly 39,000 units sold. Ford’s Lightning was sixth with just over 33,500 models sold.
Ford extended its “Power Promise” promo earlier this year to boost demand, giving EV buyers a Level 2 home charger and other benefits, but Lightning sales are still down.
The American automaker cut Lightning production at its Rouge Electric Vehicle Center last year, citing slower-than-expected demand. A new report from Automotive News claims Ford is now ending a pilot program to stock and distribute EVs through regional hubs after it failed to catch on. It was designed to speed up deliveries.
Although Ford plans to launch a smaller midsize electric pickup, it won’t arrive until at least two more years. With new competition, like the Ram 1500 REV and Volkswagen Scout pickup, hitting the market over the next few years, Ford may find it even harder to attract buyers.
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Costco’s Auto Program recently introduced some new member-only incentives, and the 2025 Volvo EX90 BEV is now on its list.
Volvo is offering Costco Executive Members $2,000 off the 2025 EX90. Costco Gold Star and Business members are eligible for $1,500 off. The incentives are available on all versions of the Volvo EX90 for members who purchase or lease from February 24 to April 30, 2025. It’s the only non-GM EV that’s that’s eligible for an incentive through the EV program.
The offer is compatible with A-Plan pricing for employees, as well as Affinity Pricing for teachers and first responders. Costco members will have had to have been members as of February 23 and be the primary members on the Costco account to qualify.
However, CarsDirect gave the heads up on how buyers can get up to $10,000 off the EX90’s MSRP. As we stated, if you’re a Costco Executive Member, that’s $2,000 off. Then, add the $7,500 EV Lease Allowance and a $500 loyalty discount on leases if you currently own or lease a Volvo or have owned or leased a Volvo within the past six months.
With the destination fee included, the base EX90 MSRP starts at $81,290, so that brings it down to $71,290, a more than 12% discount, a pretty good deal.
The 2025 AWD Volvo EX90, which can seat seven passengers comfortably, has a range of up to 310 miles and is NACS-compatible. It has a 510 hp engine, 110 kWh battery capacity, and can go from 0-60 mph in 4.7 seconds.
Read more: Review: Volvo EX90 is a smooth AWD 7-seat luxury kid-hauler
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Environment
Tesla chairwoman sells $33 million worth of TSLA as she lets Elon Musk destroy the brand
Tesla chairwoman Robyn Denholm has sold another $33 million worth of Tesla stocks (TSLA) as she lets Elon Musk destroy the company’s brand.
As the head of Tesla’s board of directors, Denholm is amongst the few people who actually have oversight over Elon Musk at Tesla.
While Musk is CEO, he owns only about 13% of Tesla’s shares. Still, he is seen as having complete control over the company and the board, which is actually what led to a judge rescinding his compensation package last year.
That’s partly because when he “negotiated” himself a $55 billion compensation package with the board, the board also gave itself exorbitant compensation, which it eventually had to partly give back to the company after shareholders sued it for excessive compensation.
Despite Musk making threats to shareholders to get more control over Tesla and resorting to resource tunneling, the board, including Denholm, has remained silent.
Meanwhile, Denholm has been pocketing generational wealth through Tesla.
The chairwoman has received hundreds of thousands of Tesla shares at a discount through stock options as part of the previously mentioned “excessive board compensation,” and she has been selling them as son as she is allowed.
Last month, she sold $43 million worth of Tesla stocks, and today, Tesla revealed through a required SEC filing that Denholm is another 112,390 Tesla shares worth over $33 million through Merill Lynch:
With this sale, she has now sold over $100 million worth of Tesla stocks over the last 3 months.
Kimball Musk, Elon’s brother, and Tesla’s Chief Financial Officer Taneja Vaibhav also recently sold ahead of a recent drop in the company’s stock price.
Electrek’s Take
Over $100 million in the last three months—that’s apparently the going rate for a chairperson to let Elon Musk destroy years of work building the Tesla brand.
That’s a hard deal to pass on, especially if you have low morals, which is Tesla’s main problem right now. Musk has surrounded himself with yes people with low morals.
He has distanced Tesla from its mission and no one is saying anything because they are let go or getting compensated to shut up about it.
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