What is the current state of gas prices? What will be the impact of the Trump administration's policies on the oil and fuel markets? These questions and more were fielded by Denton Cinquegrana, chief oil analyst at OPIS, a Dow Jones Company, during a recent Convenience Matters podcast.
The good news about gas prices is they’ve been fairly stable, noted Cinquegrana. However, as anyone in the retail fueling business knows, there are two truths about gas prices: They go up, and they go down.
Similar to his first term, President Trump has made it clear he would like to see gas prices go down. But would that be a good thing?
"If gas prices were to get cut in half, something happened that’s bad because dramatically lower prices are related to dramatically lower demand—and that usually means some sort of economic distress. It is very difficult to drop prices significantly in a positive economic situation,” said Cinquegrana.
The new administration issued a flurry of executive orders on day one, including “Unleashing American Energy.” The executive order eliminated President Biden’s electric vehicle (EV) mandate and terminates, “where appropriate, state emissions waivers that function to limit sales of gasoline-powered automobiles.”
The executive order also opens up the ability for offshore drilling and oil production. Cinquegrana noted that while a president cannot directly control oil prices, the administration can facilitate access to oil production by opening up more lands for drilling and making the permitting process easier.
Even with a new rig and if the permitting process started February 1, oil wouldn’t come to market until the 2030s. “Something to keep in mind—sure we make it easier, but some of that oil is not going to come to play right away. With West Texas and fracking on land, that's a little bit closer to seven months. That's where you see the more near-term impacts,” he said.
In the U.S., “We're producing a lot of oil as it currently stands. Can we go up a couple hundred thousand barrels a day? Sure. In 2025, the two to three million barrels that's being thrown around lately, I think that's a little bit tough and a little bit too much to ask for,” said Cinquegrana.
Listen to the full podcast, “A New Administration and the Fuels Industry,” and plan to hear even more insights on where the oil and fuel markets are heading by attending the upcoming NACS State of the Industry Summit in Dallas. During the two-day event, Cinquegrana will lead “Fuel Deep Dive with OPIS,” a session on April 10.