Oil and gas prices are falling, a boon for drivers, and Trump

Time of India

a day ago

The price of
crude oil
dropped to $62.46 a barrel Monday morning, part of a downward trend that some analysts say could continue into next year. The lower cost may be a sign of a global economic slowdown, but its most apparent effects are a boon to consumers: lower
gasoline prices
.
And if Americans have more money left over after filling up their gas tanks, the
Trump administration
is eager to claim credit.
"
Energy prices
fell in July, including gasoline, which is down nearly 10 per cent over last year," Karoline Leavitt, the White House press secretary, said last week. "This administration continues to be wholeheartedly committed to putting more money back into the American people's pockets," she added.
President Donald Trump has frequently used the cost of fuel as a measure of his success. In July, a White House statement said plummeting prices were "fueling economic growth from coast to coast."
That "is like a dream come true for President Trump," said Robert McNally, a former energy adviser to President George W. Bush who is now president of Rapidan Energy Group, a research firm in Washington.
Many Americans often measure their quality of life by the ebb and flow of
gas prices
and other staples like eggs and milk.
"For American consumers, it's like a visible tax cut," McNally said of falling energy prices. "You see it every day, even if you're not tanking up that day."
The national average price for a gallon of regular gasoline was $3.14 Monday, compared with $3.41 at the same time last year, according to the motor club AAA. Trump had claimed in April that prices in several states were below $2 a gallon, but the lowest state average at the time was $2.68 a gallon, in Mississippi, according to AAA. The lowest state average Monday was $2.67, in Oklahoma.
There is no single reason for the recent drop in oil and gasoline prices. Among the factors that are at play is that global demand for oil and fuels like gasoline appears to be growing only modestly. And there seems to be plenty of supply of oil, including from the United States, Saudi Arabia and Russia -- the world's three largest producers.
The consumer price index report for July showed that annual
inflation
held steady last month, owed in part to a 2.2 per cent drop in gasoline prices from June to July. That dip helped to offset costs elsewhere, as businesses begin to grapple with Trump's tariffs on imported goods. A measure of underlying inflation that strips out those costs as well as other volatile items like food prices accelerated, however.
No matter what has caused the drop in
fuel prices
, analysts said that it was clearly helping Trump politically at a time when his overall approval ratings sit at about 44 per cent.
"For people who aren't looking for the minutiae of politics or policy, they're just thinking about bread and butter issues, motor fuels are a big factor," said Kevin Book, the managing director of ClearView Energy Partners, a research firm.
Low
oil prices
could be a bad sign for the
U.S. economy
, Book added, as oil companies shut down rigs and lay off workers.
"Oil patch impacts to the broader economy are pretty significant and shouldn't be ignored," Book said. "But everybody's a driver, and only a small number of people are directly affected in the industry itself." That could mean Americans without ties to oil won't be aware of the ripple effects happening on the ground.
This year, the oil cartel known as OPEC+ has increased production, helping to drive down prices. The boost in output comes after some members of the cartel chafed at losing market share to other producers such as the United States, Guyana and Brazil. Saudi Arabia, the de facto leader of OPEC, and other oil-producing countries also appeared to be acting out of a desire to please Trump.
Last week, the U.S. Energy Information Administration predicted that the price of oil would continue falling into 2026, potentially reaching $51 a barrel.
But predicting oil prices with any certainty is incredibly difficult. The market is highly susceptible to geopolitics. Days before President Joe Biden left office, he imposed new sanctions on Russia's energy sector, and Brent crude oil, the international benchmark, rose.
Aside from "false alarms about a geopolitical or sanctions disruption, oil prices have been gently trending down since the highs made after the Russian invasion of Ukraine" in 2022, McNally said.
Trump would like to keep it that way.
"There are few things that terrify an American president more than an oil price spike," McNally said. "And there are a few things that are more pleasing than falling and low oil prices."