Barron’s Senior Energy Writer Laura Sanicola and OPIS Chief Oil Analyst Denton Cinquegrana discuss what’s ahead for oil this week.

Watch this week’s episode for insights into the recent short-term oil price recovery despite earlier tariff concerns, key indicators for fuel demand, and the surprising stability of refining margins alongside potential refinery adjustments in California.

Transcript:

LAURA SANICOLA: Hi, everyone. This is Laura Sanicola, author of Barron’s Energy Insider newsletter, and I’m here today with Denton Cinquegrana, chief oil analyst at OPIS. Denton, thanks for being here today.

DENTON CINQUEGRANA: Hey, Laura. How are you?

SANICOLA: Yeah. Good. Thanks. So let’s let’s talk about oil. We saw a little bit of support last week, and after oil fell practically ten dollars in a very short time frame from the announcement of liberation tariffs to now. Has oil found a floor in your view, and what prompted the rally?

CINQUEGRANA: Yeah. It seems like we did at least find a short-term bottom for the time being. We’re just under sixty dollars for Brent, for WTI rather. Brent got close to dropping below sixty dollars but didn’t quite get there.

The market has recovered some. I think oil markets have a tendency to overdo it to the downside and overdo it to the upside as well. So this was overdone to the downside. You get some kind of short covering and buying to come back in, but also headlines over the recent days. China willing to negotiate on tariffs, maximum pressure on Iran recently announced with increased sanctions. Obviously, Trump’s administration’s kind of pressure on Venezuela as well. All these things add up to potentially pulling barrels out of the market.

Obviously, the concern from tariffs is this puts a damper on global oil demand and GDP as a whole. So if with these things happen and the potential negotiations on tariffs, maybe those kind of dire warnings about GDP and oil demand destruction, if you will, or lack of growth, I should say, is, you know, may not be as bad as originally thought at the beginning of the month.

SANICOLA: And I know you’re you’re a fuels guy, and you’re in the weeds of the weekly data every week. What indicators, economic or, you know, fuel specific indicators are you reading to get a sense of, where demand is headed for things like gasoline, jet fuel, diesel?

CINQUEGRANA: Yeah. Sure. Well, the Energy Information Administration does always, you know, post a calculation on gasoline demand, jet fuel demand, diesel demand. These numbers can be, you know, pretty wild on a week-to-week basis.

I think one piece of data, particularly for jet fuel that does look, you know, helpful is the amount of TSA, people checking through, the TSA gate. So that’s free data that’s available as well. So that’s a good one to kinda measure. Hey. Are we doing more passengers now than we were at this time last year, etcetera, things like that.

You know, for for diesel, any sort of trucking data is is always good. We’re actually kind of in a trucking recession, I learned recently from the American Trucking Association. Fleet volumes have been dropping over the past eighteen months or so. So little bit of a a demand drop there. But also for gasoline, you know, vehicle miles traveled is always good. And from OPIS, we get data from retail volumes from about forty thousand stations around the country, which works out to be about a quarter of the stations in the United States, and volumes tend to be pointing lower. I think even though VMTs are moving higher, when you do that in conjunction with the OPIS data or even the EIA weekly demand data, it’s a it’s just more of a confirmation that vehicles are a lot more efficient than they were four, five, six years ago.

SANICOLA: I wanna lastly talk about refining with you. Refining margins have kind of held up surprisingly well. You know, didn’t have the quarter they wanted last quarter, but we got news this week that Valero is planning to potentially idle or convert, or completely shut down a refinery in California, the Benetia refinery. What do you make of that in light of, like, the larger macro environment for refiners?

CINQUEGRANA: Yeah. I think well, California is one of those spots where, one, the refining industry and the oil industry in general does have an adversarial relationship with the state government.

But, you know, anyone in these circles has long thought that Valero would do something at Benicia in particular, to see it actually you know, we always thought, oh, yeah. Benicia will probably close it sometime within the next couple of years. But to actually see it in writing is a bit of a surprise.

Whether they idle that refinery and still continue to supply, they still have upwards of five hundred retail Valero stations in California. So do they wanna continue to supply the brand? They’ll have to do that via imports if they do decide to idle the refinery.

Either way, even if they convert it to a renewable diesel and SAF, for example, they’re still gonna have to supply gasoline to those Valero stations if they choose to do so. So, again, a lot can happen in a year that’s scheduled to have its final fate, by the end of April 2026, But we have to kinda wait and see what happens, but a lot can change in a year.

SANICOLA: Alright. Well, thanks so much, Denton, as always, and thanks everyone for joining us. We’ll see you next week.