Oil Prices Could Plunge to $40 in 2025 if OPEC Unwinds Production Cuts, Analysts Predict

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Oil prices could drop significantly, possibly reaching as low as $40 per barrel in 2025, if OPEC+ reverses its current output cuts, according to market analysts who foresee a challenging period ahead for crude. Tom Kloza, OPIS’ global head of energy analysis, notes that concerns over 2025 oil prices are more pronounced than in recent years. A complete unwinding of OPEC+ cuts could result in a steep price drop due to rising supply without matching demand, Kloza stated.

Currently, global oil prices remain stable, with Brent crude trading at around $72 per barrel and U.S. West Texas Intermediate at approximately $68. However, Henning Gloystein from Eurasia Group anticipates that if OPEC+ fully reverts to pre-cut production levels, crude prices could indeed fall sharply, especially given expectations of only modest demand growth of about 1 million barrels per day next year. Saul Kavonic, senior energy analyst at MST Marquee, echoed this, suggesting that a sudden lift of cuts might trigger a price war over market share, pushing prices down to levels seen during the COVID-19 pandemic.

OPEC+ has been maintaining voluntary production cuts to stabilize prices, with a recent extension of these cuts. In September, the group delayed its plan to reduce the 2.2 million barrels per day voluntary cuts until December, aiming to prevent further price declines amid tepid demand from China, the world’s second-largest oil consumer. Additionally, OPEC lowered its 2025 demand growth forecast to 1.5 million barrels per day, acknowledging slower-than-expected economic recovery and oversupply risks due to increased output from non-OPEC producers like the U.S., Canada, Guyana, and Brazil.

Despite this, market analysts predict an overall bearish trend for oil next year, with a potential build-up in oil inventories. Citibank’s Martoccia Francesco highlighted that the oil surplus could reach 1.6 million barrels per day if OPEC+ adheres to its current plan. Citi’s forecast suggests Brent crude prices may average $60 per barrel in 2024.

Adding to the uncertainty, U.S. President-elect Donald Trump’s administration could influence global oil markets. Trump’s “drill baby drill” energy policy, aimed at boosting U.S. oil production and reducing energy prices, may further pressure global oil prices. Analysts suggest that if Trump pushes for lower retail gasoline prices, oil prices would need to drop to $40 or below to meet that goal. Current gasoline prices, however, remain favorable for both consumers and producers, with the national average around $3 per gallon, noted Matt Smith, lead oil analyst at Kpler.

 

OpenAI Co-Founder Greg Brockman Returns to Company After Leave

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Greg Brockman, co-founder of OpenAI, has resumed his role at the artificial intelligence company following a three-month leave. Brockman announced his return on X (formerly Twitter) on Tuesday, stating, “longest vacation of my life complete. back to building @OpenAI.” His reentry comes amid a period of significant transitions within the Microsoft-backed AI company.

OpenAI confirmed Brockman’s return and noted that he and CEO Sam Altman are working together to define a new role tailored to address the company’s major technical challenges, according to Bloomberg News. Brockman’s return follows a series of recent leadership changes at OpenAI, including the exits of former Chief Technology Officer Mira Murati, co-founder John Schulman, and co-founder Ilya Sutskever. Murati and Sutskever have since started their own AI ventures.

In a related leadership shift, Altman also returned to OpenAI’s helm in November 2023 after a brief, controversial exit. Altman’s ouster, which was abruptly initiated by the company’s board without much explanation, sparked a tumultuous period for OpenAI, ultimately leading to his reinstatement.

 

SoftBank to Receive Nvidia’s Latest Blackwell Chips for AI Supercomputer

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SoftBank’s telecommunications unit in Japan will be the first to acquire Nvidia’s latest Blackwell-designed chips, marking a key step in the company’s ambition to harness artificial intelligence capabilities. The California-based chip giant made the announcement at a recent AI event in Tokyo, featuring both SoftBank Group CEO Masayoshi Son and Nvidia CEO Jensen Huang. SoftBank also plans to incorporate the Blackwell architecture in its upcoming supercomputer, as Son strengthens his group’s investment in AI through strategic acquisitions, including a stake in OpenAI and the purchase of chip startup Graphcore.

During a lively “fireside chat,” Huang recalled an instance when Son, already a visionary in AI, once proposed lending him the funds to buy Nvidia, a company the market undervalued at the time. “He wanted to lend me money to buy Nvidia—all of it. Now I regret not taking it,” Huang said, smiling. Son had made the offer shortly after acquiring Arm, a chip designer he later attempted to sell to Nvidia, though regulatory issues prevented the merger.

Over the years, Nvidia has transitioned from a primary focus on gaming graphics chips to becoming the global leader in AI chip technology, now powering much of the AI revolution. While Son has earned recognition as an early-stage investor in tech, with notable stakes in Alibaba and other successes, he has also faced setbacks, such as his high-profile investment in WeWork.

With telecom firms worldwide exploring new growth avenues, SoftBank and Nvidia are collaborating on a network to support both AI and 5G services, aligning their visions for the future. “It’s the same vision that we can smell, right? It’s like a wolf smell wolf,” Son joked about their shared outlook. Huang responded with humor, “I have two puppies. I don’t like that mental image,” drawing laughter from the audience.