Decline in oil prices over the past half-year: implications for gasoline costs examined.
Oil industry CEO, Dan Eberhart, has a bold opinion about the current administration's role in providing cheaper energy to consumers. He shared his thoughts on 'Maria Bartiromo's Wall Street.'
As we stand today, oil prices are hovering around their lowest levels since spring 2021, with a barrel of West Texas Intermediate crude priced at $59, down from $74 at the beginning of January. In contrast, gas prices have seen a slight increase of about 10 cents per gallon since January, according to the U.S. Energy Information Administration (EIA). However, they are still 50 cents lower than a year ago, holding steady to President Trump's second-term promise to reduce energy prices.
The Future of Gas Prices
The EIA expects gas prices to dip as the year progresses. "The U.S. retail price for regular grade gasoline averages about $3.10 per gallon (gal) in our forecast for this summer (April-September), about 20 cents/gal less than our forecast in the March STEO," states the EIA's April short-term energy outlook. This decrease would mark the lowest inflation-adjusted summer average price since 2020, similar to the five-year low experienced in 2020 due to the COVID-19 pandemic.
The Churning Waters of Oil Prices
Though oil prices have recently dropped, several OPEC+ members are considering further accelerating oil output hikes in June for a second consecutive month. This push could be driven by disagreements over compliance with production quotas, according to Reuters sources. In April, oil prices hit a four-year low, largely due to the U.S.-China trade war and an unanticipated increase in OPEC+ output by 411,000 barrels per day of oil in May. Three times the original planned increase.
According to the EIA, global oil inventories will start to rise starting in mid-2025 as OPEC+ members unwind production cuts, production grows in non-OPEC countries, and oil demand growth slows.
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- Dan Eberhart, the Oil industry CEO, believes the current administration could help lower energy prices further, as he expressed during his interview on 'Maria Bartiromo's Wall Street'.
- Despite the recent drop in oil prices, OPEC+ members are debating to increase oil output hikes in June for a second consecutive month, potentially due to disagreements over production quotas, according to Reuters sources.
- In the EIA's April short-term energy outlook, it is predicted that the average gas price will decrease throughout the year, reaching its lowest inflation-adjusted summer average since 2020, similar to the five-year low experiencing in 2020 due to the COVID-19 pandemic.
- According to the EIA, global oil inventories are expected to begin rising starting in mid-2025, as OPEC+ members unwind production cuts, production grows in non-OPEC countries, and oil demand growth slows.
- In 2025, we might witness an increase in oil inventories due to OPEC+ members unwinding production cuts, increasing production in non-OPEC countries, and decreasing oil demand growth, according to the EIA's forecasts.
