Gold may still be glittering, but another commodity has been left in the dust this year: oil.
Crude oil has fallen 14% in 2025. In fact, oil prices hit their steepest monthly low since 2021 in April, while gas prices dropped to their lowest level in four years this Memorial Day weekend.
The slide is due to a slew of reasons. Fears that massive US tariffs could trigger an economic slowdown stoked concern earlier this year that demand for oil was shrinking. At the same time, President Trump has vowed to drill more than ever while OPEC+ is increasing output, both of which would cause an increase in supply.
Speaking of which, OPEC+ is expected to hike oil production by another 411,000 barrels per day in July during its meeting this week, on the heels of increasing its output in June and May. That announcement pushed prices down 0.91% today.
And the future doesn’t look particularly bright for the commodity: In a survey compiled by the Wall Street Journal including price targets from Goldman Sachs, Morgan Stanley, and JPMorgan, banks cut their Brent crude oil forecasts to an average of $68.23 a barrel for 2025, down from an average forecast of $72.13 per barrel in March.
While lower prices at the pump can be a boon to consumers, lower oil prices can hurt the economy, and devastate oil-producing nations. But one group of stocks that benefits from lower prices is oil refiners such as Marathon Petroleum and Valero Energy.
Exxon vs Chevron
There’s a lot more going on in the world of energy than slipping oil prices.
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First, two energy behemoths are going head to head over a $1 trillion oil field in Guyana this week. Chevron, through its attempted acquisition of Hess, would get access to 30% of the lucrative Stabroek Oil field. But ExxonMobil, which owns 45% of the field and operates it, along with Chinese oil firm CNOOC, which owns 25% of the stake, are trying to block the acquisition using the right of first refusal, cutting Chevron out.
A hearing with the International Chamber of Commerce begins this week to decide whether or not Chevron gets a slice of the pie.
The battle is high stakes: For Chevron, a win would be a lifeline, given shares are down 13.34% over the past 12 months and the oil company’s reserves fell to their lowest level in a decade last year.
Don’t forget: that’s not the only corporate drama rocking the world of oil. Last week, activist investor Elliott Investment Management won two seats on the board of oil refiner Phillips 66, in an escalation of their boardroom fight.
The energy industry sure is energetic this year.—LB