When President Trump began his second term, in his inauguration speech, he announced that America “drill, baby, drilling”, promising drilling boom and lower prices.
For nine months, Trump can only get “lower prices”.
According to data published by the end of last month, the US oil and gas sector in the US oil and gas sector in the US, and the second quarter of the sector in the sector, the USA. Oil prices did the same.
Participants in the oil and gas industry, interviewed in the Dallas Fed study, said the conditions were getting worse.
Brent Crude (BZ = F), global oil benchmark, future transactions decreased by more than 15.8%per year, while West Texas Texas Texas Intermedia (Cl = F), US benchmark, future transactions decreased by more than 16.8%. The US Energy Information Administration hopes the trend will continue and predict that US oil production in 2026 It will decrease by approximately 1%when the oil price will fall and the production of natural gas (NG = F) will remain approximately equal.
When green prices are high, the oil and gas industry benefits. Increased prices give companies a reason to increase their investment in production equipment and drill more wells because they know they will get a good price for their product. When prices fall, drilling costs are harder to justify.
“The administration amounts to $ 40 per barrel green oil and with tariffs foreign [piping supply used for drilling, input] Prices have risen and the drilling will disappear, ”said one respondent in Dallas Fed in a monthly energy study.
Part of the problem is impending supply gluten, so prices are suppressed. The demand for gasoline in the US is expected to increase only a little by 2026. Meanwhile, more electricity is expected to consume the largest part of its demand, which is satisfied with solar energy. Oil consumption also decreased throughout the rest of the world, including Europe, Central Asia, Latin America and China.
At the same time, the OPEC cartel has confirmed the several times increased production rate, as Saudi Arabia seeks to deprive the market from the US. More recently, the cartel announced on Sunday that its Member States would increase production by 137,000 barrels a day from November, choosing the same modest monthly increase as October.
To make it worse, China, traditionally demand growth engine, has accumulated huge green oil stocks. US oil refinery from 2022 June Carried out the highest capacity by creating an obstacle for processing and even more depressing green prices.
Bottom line: President Trump received one part of his wish: gas pump prices decrease on average. In early September, the retail prices of gasoline are predicted in 2025. On average, $ 3.10 per gallon, ie $ 0.20 per gallon than last year. It is expected that 2026 Prices will decrease even more – an average of $ 2.90 per gallon.
One big beautiful bill, the Signature Policy of the Trump’s administration, should somewhat facilitate decreasing production. The law increases the rental supply and reduces the federal rates of royalty, essentially providing more land at oil and gas companies at cheaper prices.
However, only 6% of Dallas Fed survey respondents said they believe that politics would have a big impact.
“It looks like the US oil rules, the availability of federal lands and the” drilling baby drilling “mantra, do not seem to change the strategy in this part of the oil industry,” wrote Guinness Global investor analysts Jonathan Waghorn and Will Riley.
The effect is evident in the field. In the Bakken formation in a large oil and gas field passing through the North and South Dakot, Montana and Central Canada, Exxon Mobil (XOM) sold $ 550 million.
Natural gas prices are rising, but the US expands its exports, maintaining production fundamentally.
The impact on the oil and gas sector also looks more wider.
According to the Dallas Fed survey, the factory’s activities in Texas expanded in September, but slower than August. New orders and order growth rates have fallen a month, and prices paid for raw materials have increased – although slower clip than August.
“We see that the oil industry is slowing down and hesitating to invest in their own business,” said one respondent working in machine manufacturing.
Instead of maintaining domestic production, the survey respondent, Trump’s administration, coordinated with the OPEC cartel, trying to use excess to increase prices and in turn to obstruct fossil fuel producers.
The energy information administration predicts that the conditions will continue to get worse. The agency hopes that Brent Crude, currently selling around $ 68 per barrel, will be an average of $ 59 per barrel in the fourth quarter and $ 50 per barrel in 2026. And stocks are more than 2 million barrels per day during the same period.
“The previous administration was fascinated by the industry, buried it in regulation and cheered on the capital’s flight under the environment, social and management headline,” said one respondent of the Dallas Fed survey. “The current administration is now finishing work.”
Jake Conley is a news reporter covering US Yahoo Finance shares. Follow it x @byjakeconley or email. By mail Jake.conley@yahooing.com;
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