Price At The Pump: Oil Investors Have A Lot To Digest

For the past couple of weeks, oil prices have held fairly steady at an elevated level, thanks to a variety of variables.  Patrick DeHaan with GasBuddy.com said one of the biggest issues on the minds of investors right now, is the 25% tariffs against Mexico and Canada that kicked in Tuesday.

“While that could impact energy prices, specifically oil prices, it could impact a lot more than that; the broader economy.  So, oil prices have had a lot to digest.” 

DeHaan added investors are also watching the Chinese economy, which has struggled for the past couple of years, and will be dealing with additional tariffs from the Trump Administration.

For months, there has been speculation that OPEC would increase production.  DeHaan says he does not expect that to occur any time soon.  But, he noted there could be a reason for OPEC to consider increasing oil production in the long-term future.

“A report out [Monday] from the Energy Information Administration [EIA] that suggests in 2026, U.S. inventories of gasoline, diesel distillates, and jet fuel will likely fall to their lowest level since the year 2000," DeHaan stated.  "As global inventories continue to decline, that certainly could be a reason that OPEC does eventually increase production. I think the market, the reality is a bit disconnected. Global inventories of crude oil remained relatively low, but we've seen oil markets shrugging off that sentiment, at least for now, as investors are putting more money into things like semiconductors than they are energy.”

DeHaan added the expectation in the short-term is for oil prices to hold steady, but fuel prices are expected to move up.  He noted as refineries switch to the summer blend of fuels, prices will likely move higher nationwide.

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