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President Donald Trump calls on oil producers to “drill, infant, drill”. Investors Oil and Gas in the US may not be on board With the plan.
“Now, with low oil prices, I think we will start to see how many companies that start returning to their capital costs,” said Clark Williams Dery, a financing analyst at the Energy and Financial Analysis Institute.
The United States is already producing more crude oil than any other nation in history. In December 2024, US oil and gas firms produced more than 13.49 million raw raw bars a day. This is all the time high production speed according to data Records of Energy Information Administration in Energy Information.
High production rates tend to reduce prices that benefit consumers. But when the prices are lowered too far, affecting the manufacturers’ profits, they can stop drilling.
Most Americans see oil prices reflected in the price they pay for a gallon at gas stations. The retail price of gasoline varies on the basis of seasonal trends and other factors. On March 24, 2025, the nationwide average price of regular non -governmental, which was about $ 3.10 per gallon, according to Gasbuddy Data. This is much lower than the average nationwide price of more than $ 5 per gallon, in June 2022, Gasbuddy Data reports.
US gasoline prices are expected to fall by 11 cents in 2025 and 19 cents in 2026, the forecasts of the US energy administration reported.
According to EIA, raw oil prices in the US made up about 52.6% of the average retail price of gasoline in 2023, the latest data available.
The future raw oil price trajectory is a key problem for investors in the oil and gas industry.
On March 24, 2025, a costs based on the American landmark for crude oil, the intermediate Western Texas hesitated below $ 70 a barrel. S&P Global Commodity Insights Analysts are waiting WTI to average $ 66 per barrel in 2025.
Prices for crude oil, January 2025 to the present.
Low oil prices affect the profitability of oil and gas businesses that should be sold in the world markets.
Manufacturers interviewed by the Federal Reserve Bank of Dallas in March 2024 reported that they will need to sell oil at the price of “Breakeven” about $ 64 a barrel to profit from drilling new wells.
“This is a real problem to get oil prices at the level with which the manufacturer is comfortable, but also what consumers can live with,” Williams said.
Look video above to learn more about Trump’s second energy policy
