Every President in modern history wishes they could do what Trump is about to do.
Without question, it’s one of the biggest political victories our Commander-in-chief can achieve during his presidency; many strive for it, yet few can successfully do it.
I’m talking, of course, about providing Americans with cheap gas prices.
Each year as we head into Memorial Day Weekend — the official start of the summer driving season — I’m reminded about this powerful goal that so easily backfires on the POTUS.
After all, high prices at the pump can be a death knell for some presidents. Your political rivals can wield it against you like a weapon of mass destruction at the voting booth. It’s so important that each and every sitting president tries their best to manipulate gasoline prices.
Nothing is worse in our minds than having to pay an arm and a leg to fill up our tanks.
And this year is only one of two years in recent memory that the president can boast about low gas prices; the other was during COVID, which we both know was an anomaly given that gasoline demand cratered as the lockdowns were put in place.
Whether you love or hate him, President Trump DOES get to gloat over cheap gas.
Oil Price Forecast 2025: The Summer Driving Season is Underway
Like I just mentioned, the last time there was this kind of relief from high pump prices was back in 2020.
But hey, don’t take my word for it, you can see this for yourself in the EIA’s own data:
For the record, today’s gas prices are nearly 15% lower than where they were a year ago.
We can’t blame a lack of demand, either. According to the EIA’s latest Short-Term Energy Outlook, U.S. gasoline consumption will actually be flat this year compared to the summer of 2025.
But is this realistic? Surely the EIA has never had to revise its forecasts in the past like some other energy agencies did recently.
In fact, projections from AAA are calling for a new travel record this year, with 45.1 million people traveling at least 50 miles over this Memorial Day weekend, which thumps the previous record of 44 million people set all the way back in 2005.
That’s 39.4 million drivers and 3.61 million people fighting through TSA to take to the airways.
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And just think, President Trump didn’t have to drain the Strategic Petroleum Reserve to do it. Are you starting to wonder what it took to get us to this point? Well, let’s break it down, shall we?
It’s no secret what goes into every cent of a gallon of gas:
The fact that crude oil accounts for roughly half of the cost for gasoline, it’s easy to understand why President Trump is so happy to tank WTI prices below $60 per barrel.
I also have a feeling that he has no idea of the potential supply crunch it’s setting us up for during the second half of 2025.
You’ve heard me say that the cure for low oil prices IS low oil prices, right? For the most part, that’s true, and the ultra-cheap price environment that oil finds itself in today is going to impact the market in a few major ways.
After all, cheap gas means more demand; the higher the demand, the higher prices will rise in the absence of supply growth. And make no mistake, dear reader, there WILL BE no supply growth over the short-term.
Pushing aside the ridiculous production estimates this year by the EIA that call for U.S. output to average 13.4 million barrels per day (spoiler: It won’t!), there’s no doubt in my mind that our domestic production is headed back under 13 million barrels per day… and it won’t even be close.
Here’s the dirty little secret to U.S. oil production: Our output is heading lower no matter how much our President wants it to rise.
Unless we see WTI prices rise back above $70 per barrel — and soon — then there will be no reversing the upcoming decline. I’ve told you before that drillers can’t simply turn the taps back on overnight; we’ve already seen a huge dip in the drilling rig count, which is another sign that lower production is ahead.
This is what will lead to a tighter supply/demand dynamic during the latter half of the year, which means oil prices only have one direction they can logically go — Up!.
But hey, let’s enjoy the cheap gas while we can.
Until next time,
Keith Kohl
Check us out on YouTube!A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.
For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.
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