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 decoupling of oil prices from equities post-tariff news, OPEC+ production considerations, a positive outlook for summer fuel demand from refiners, and the current limited tariff impact on the US refining industry.

Transcript:

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

DENTON CINQUEGRANA: Hey, Laura. How are you?

SANICOLA: Good. Thanks. So the big story this week is that WTI crude futures have sort of started to diverge from equities for the first time since President Trump announced Liberation Day tariffs. They had been moving both lower after that announcement. And now you see, equities rallying a bit while oil continues to slide from last week’s level. What’s going on in oil markets?

CINQUEGRANA: Yeah. So WTI is kind of, it’s also kind of settled into a little bit of a range here from about, call it, 61 to 65-ish, and then Brent up about three dollars more. But two headlines that kinda moved the needle for WTI and Brent as well this week was the first one was Kazakhstan saying, hey, look. We have some of these older fields that if we stop producing and they’re one of the kinda guilty of being some of the OPEC+ cheaters.

But they said, basically, if we stop producing out of some of these older fields, they’ll they’ll fall apart, essentially. So they wouldn’t be able to recover oil from there. The other one was OPEC+ saying there’s some within the group saying, hey. We rolled forward three months’ worth. Let’s do it again. So that kinda spooked the market into having more supply. We still have the demand concerns going forward into the summer as the summer driving season does start to get a little bit closer.

SANICOLA: Speaking of demand, some of the US refiners have started to report earnings, Valero, Phillips 66, and we’ve got Marathon coming up this week. What are they saying about the outlook for fuel demand this year?

CINQUEGRANA: Yeah. They seem to be pretty positive about fuel demand this summer. Valero noted that, yeah, the first quarter was a little bit below fourth quarter, a little bit below trend, but they’ve noticed more recently that product demand, particularly gasoline, has been pretty strong. Now diesel and jet fuel in the first quarter were pretty strong, you know, kinda year over year and quarter over quarter. So, not much of a surprise there. We had a cold winter, but they’re positive on gasoline demand, which, again, could bode well. They’re starting to see stories about how people may opt to not fly this summer and perhaps even drive for vacation if they’re gonna take a vacation. Flying is certainly not as glamorous as it used to be, so I could understand why some people may not wanna fly this summer.

SANICOLA: So far, tariffs hitting many industries, but for refiners, not so much yet.

CINQUEGRANA: Yeah. Not yet. And, again, a lot of the, you know, when you consider the USMCA agreement, you know, Mexican energy, Canadian energy is exempt from that. So if that continues, I don’t think there’s a massive tariff impact on fuel. But, you know, again, things have changed. I mean, the president’s been touting that energy and I’m assuming he means gasoline is below two dollars a gallon in three states. Well, he’s only partially right on that. There’s no gasoline that’s below two dollars in any state.

But I went through the OPIS database of retail gasoline prices, and I found eight states that have an e85 price below two dollars a gallon. Now if you have a flex fuel vehicle, that’s great. You could take advantage of that. There’s not many of them out there. OEMs stop making them. So while you know, again, it may sound like part hyperbole, but he was partially correct on that one.

SANICOLA: Got it. Well, thanks so much, Denton, for, talking this through with me, and thanks everyone for joining. We’ll see you next week.