Barron’s Energy Insider | In Partnership with OPIS | Video – October 21, 2024
Watch: Barron’s Managing Editor Daren Fonda and OPIS Chief Oil Analyst Denton Cinquegrana discuss what’s ahead for oil this week.
Transcript:
DAREN FONDA: Hi. I’m Daren Fonda, managing editor at Barron’s. I’m talking to Denton Cinquegrana, chief oil analyst at OPIS. Welcome, Denton.
DENTON CINQUEGRANA: Hey, Daren. Good to be here again.
FONDA: So let’s talk a little bit about gas prices. They’ve been fairly flat at around $3.20 a gallon nationally. But OPIS and your data, you’re detecting something else and a bit of softness in some parts of the country. Could you talk a little bit about that?
CINQUEGRANA: Yeah. The Great Lakes, the states surrounding the Great Lakes, we should start to see some retail gasoline prices drop significantly.
Seen wholesale prices fall about 20 cents over the past week. So right now, Ohio, Indiana, Wisconsin, Wisconsin, those are the first three that’ll probably drop below three dollars on an average basis. Of course, in those states, you could probably find gasoline below three dollars. And, Michigan and Illinois should be kind of coming behind, but those three are the first to get below three dollars a gallon on average. Supply seems to be doing okay. And this time of year, you don’t have that much demand. In fact, our data is showing that gasoline demand in that region of the country is running about six percent below where they were at this time last year.
FONDA: So gas below three dollars a gallon would be terrific for consumers, but Californians are not going to be getting much relief. Gas is very high in that state. Can you talk a little bit about what, some of those dynamics are?
CINQUEGRANA: Sure. Well, California is obviously a bit of a different animal. They’re still supplying summer grade gasoline for at least the next couple of weeks, where the rest of the country, we’ve moved on to fall and winter grade gasoline.
But once November rolls around and that formulation changes, you should start to see prices fall there. But, again and this is something that happens every time this time of year. They’re walking a little bit of a tight rope right now with, still supplying summer grade gasoline.
But keep an eye next year. Just recently, Phillips sixty six announced that they will be closing their Los Angeles area refinery 139,000 barrels a day sometime during the fourth quarter of next year. So, again, another supply gut punch for for the Golden State.
FONDA: And what are you expecting for gas prices overall in 2025? Do you think that we’ll still, see some increasing moderation and that prices will dip below three dollars nationally? What’s your outlook?
CINQUEGRANA: I think early in the yearand late in the in 2025 are your best potential for sub two dollar or sub three dollar gasoline. But for the most part, I do think we’ll be pretty moderate, pretty close to this year, if not a little bit below, especially if the forecast for crude oil supply to outpace demand, forecast come to fruition.
FONDA: Alright. Thank you so much, Denton.
CINQUEGRANA: Appreciate it. Anytime, Daren. You got it.