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President Donald Trump urges oil producers to “pierce, baby, drill.” It is possible that US oil and gas investors are not on board With the plan.
“At this time, with low oil prices, I think we are going to start seeing many companies that begin to criticize their capital spending,” said Clark Williams-Derry, an energy finance analyst at the Institute of Economics and Financial Analysis of the energy economy.
The United States is already producing more crude oil than any other nation in history. In December 2024, US oil and gas companies produced more than 13.49 million raw barrels per day. That is a high rate of historical production, according to US Administration Administration Records. UU..
High production rates tend to reduce prices, which benefits consumers. But if prices fall too far, affecting producers’ profits, they can stop drilling.
Most Americans see the oil prices reflected in the price they pay for a gallon in the service stations. The retail price of gasoline fluctuates based on seasonal trends and other factors. On March 24, 2025, the national average regular gasoline price was approximately $ 3.10 per gallon, according to Gasbuddy Data. That is well below the highest national average price of more than $ 5 per gallon, in June 2022, according to Gasbuddy Data.
American gasoline prices are expected to fall in 11 cents in 2025 and 19 cents in 2026, according to forecasts of the United States Energy Information Administration.
According to the EIA, the prices of crude oil in the United States represented approximately 52.6% of the average retail price of gasoline in 2023, the most recent data available.
The future trajectory of crude oil prices is a key concern for investors in the oil and gas industry.
On March 24, 2025, the spot price of the US point of reference for crude oil, western Texas Intermediate, was around $ 70 per barrel. Global Comodity Insights S&P analysts wait WTI will averaged $ 66 per barrel in 2025.
Crude oil prices, January 2025 to today.
The lowest oil prices affect the profitability of oil and gas companies, which must be sold in global markets.
The producers surveyed by the Dallas Federal Reserve Bank in March 2024 reported that they would need to sell oil at “balance” prices of approximately $ 64 per barrel to pilling new wells.
“This is a real challenge to bring oil prices to a level with which producers feel comfortable, but also with which consumers can live,” said Williams-Derry.
See the video up to learn more about Trump’s second -term energy policies
