Hear from Canary CEO Dan Eberhart: Trump admin's emergency policies could yield cheaper energy for consumers
Declining oil prices during the past half year: analysis of potential implications on gasoline costs.
In an interview on 'Maria Bartiromo's Wall Street', Canary CEO Dan Eberhart discusses the Trump administration's plans to leverage emergency policies to speed up domestic energy production.
Currently, oil prices are at their nadir since the spring of 2021, with a barrel of West Texas Intermediate crude selling at $59, a drop from $74 at the start of January. The last time oil prices dipped below $60 a barrel was in early April of 2021.
Conversely, gas prices have witnessed a slight rise since January, marking a hike of approximately 10 cents per gallon, as per the U.S. Energy Information Administration. Despite this increase, gas prices are still 50 cents cheaper than they were a year ago. As President Donald Trump surpasses the 100-day mark in his second term, affordable energy prices remain a key pillar of his campaign promises.
Gas Prices Set to Plummet alongside Crude?
Predicting the trend, the EIA anticipates gas prices to soften as the year progresses. According to the agency's April short-term energy outlook, "U.S. retail prices for regular grade gasoline are forecast to average about $3.10 per gallon (gal) during the summer (April-September), approximately 20 cents/gal less than our forecast in the March STEO. The lower gasoline price forecast is primarily due to our assumption of lower crude oil prices."
With gas prices predicted to drop to their lowest inflation-adjusted summer average since 2020, something last witnessed when oil and gas prices plummeted due to the COVID-19 pandemic, it's likely that consumers will witness relief at the pump.
Investor Concerns: Big Oil and the Slumping Crude Prices
Meanwhile, although oil prices have seen a drop, certain OPEC+ members are mulling an increase in oil output hikes in June for a second consecutive month, as per sources familiar with OPEC+ talks informed by Reuters. This comes as a dispute escalates between members regarding compliance with production quotas.
Oil prices plummeted to a four-year low in April, largely due to the U.S.-China trade war and an unanticipated decision by OPEC+ to increase output by 411,000 barrels per day of oil in May – triple the amount initially planned.
By the EIA's account, "We expect global oil inventories to start increasing from the middle of 2025 as OPEC+ members unwind production cuts, production grows in non-OPEC countries, and oil demand growth slows."
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[1] "Increased oil production can lead to lower prices if demand remains stable or decreases" - Source: U.S. Energy Information Administration[4] "Geopolitical developments can impact the global supply chain and demand for oil products" - Source: U.S. Energy Information Administration[5] "Global economic conditions can reduce demand for oil and gasoline, resulting in lower prices" - Source: U.S. Energy Information Administration
- If the Trump administration's emergency policies lead to an increase in domestic oil-and-gas production, as suggested by Dan Eberhart, it could potentially contribute to a decrease in oil prices and, consequently, lower funding requirements for the industry in terms of finance.
- With gas prices projected to drop to their lowest inflation-adjusted summer average since 2020, due to anticipated softening of crude prices, the energy sector could witness a significant impact on its revenue, particularly for companies heavily reliant on oil-and-gas sales, such as those in the oil-and-gas industry.
