Oil prices will crash to $40, even lower in the worst case scenario.
Brace yourselves: oil prices could drop as low as $40 per barrel in 2025, according to a stark warning from Tom Kloza , the global head of energy analysis at OPIS , a leading firm tracking energy market trends.
If this projection plays out, crude prices could fall by nearly 40% from current levels.
Right now, Brent crude hovers around $72 per barrel, while the WTI contract trades near $68 per barrel.
“There is more fear about 2025′s oil prices than there has been since years — any year I can remember, since the Arab Spring", Kloza said, according to an article published on the CNBC website.
Oil Towards $40: Even at $30 in Worst Case Scenario
In the worst case scenario, Kloza has warned that oil prices could even dip to $30 per barrel .
According to Kloza , a price drop to $40 could happen if the OPEC+ alliance —the coalition of OPEC countries like Saudi Arabia along with allies such as Russia — fully unwinds the production cuts.
This would likely take place in an already weak market for crude prices.
“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 explained to CNBC, noting that OPEC+ has lost considerable market share over the years.
Oil prices bottoming out: heading for Covid pandemic lows?
Kloza isn’t the only analyst with a gloomy outlook. Henning Gloystein , head of energy, climate, and resources at Eurasia Group , also thinks that oil prices could drop to $40 per barrel .
Speaking to CNBC, Gloystein pointed out that since the global oil demand is expected to grow not 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”.
Even more blunt was Saul Kavonic , senior energy analyst at MST Marquee , who warned that if OPEC+ removed cuts without considering demand —which was downgraded for the fourth consecutive month by OPEC recently—it would likely trigger a “ price war ,” forcing oil prices down to lows not seen since the Covid-19 pandemic.
However, Kavonic , who also spoke with the CNBC, speculates that OPEC+ will likely opt for a gradual rollback of supply cuts starting next year, rather than an abrupt reversal.
Original article published on Money.it Italy 2024-11-13 12:18:03. Original title: La quotazione del petrolio scenderà a $40 nel 2025. Ecco perché
