Trump Says Oil Prices are low. The Energy Report 07/30/2025

Oil prices broke out of its trading range surging above the 200-day moving average on reports that President Trump said oil prices currently are low. Then after a pop, are lower on peace hopes. OK, maybe that wasn’t the main headline but it could have been.

Yes, it is true that President Trump gave Russia 10 days to reach an agreement on Ukraine or face tough sanctions. Yes, it is true that Treasury Secretary Scott Bessent said that others could join President Trump in this coalition, a coalition of the willing, that won’t include China, to enforce these sanctions previously by President Trump that could exceed 100%.

Treasury Secretary Scott Bessant did say that China was vehemently opposed to sanctions on Russian oil and rebuked them. And if China continued after the sanctions were in place, they could be subject to secondary tariffs of over 100%. According to Reuters, “the legislation in the US Congress is authorizing President Trump to level tariffs up to 500% on countries that purchase sanctioned Russian oil he also said that he would draw other US allies into taking similar steps to cut off Russia’s oil.

Just the acknowledgment by President Trump saying that oil prices are cheap should be a game changer for the oil market because up until this point, he has always championed oil prices going even lower. President Trump entered office with the intention of lowering oil prices, and he has achieved that.

President Trump is now looking ahead as oil producers face challenges from low prices. The U.S. oil and gas rig count dropped to 542 last week, down from 544, reaching the lowest level since 2021. Remember that the rig count fell by about 5% in 2024, a cumulative drop of 25% during the year 2023 and 2024 and in 2025. The trends suggest that further reduction of 4 to 5% this year unless things change.

What’s shifting now is President Trump’s declaration that oil prices are low—a potential signal to the market that perhaps the bottom is in for now. Anyone who’s ignored or underestimated President Trump’s influence in the past has often found themselves on the wrong side of history.

In other words, it is possible that President Trump may be preparing to halt Russian oil supply and allow US oil producers to increase production.

President Trump said, “I don’t worry about oil if I put sanctions on Russia, we have so much oil in the US and we’ll just step it up more”

This statement from Donald Trump indicates a shift in policy, suggesting he may temporarily accept higher prices to support U.S. oil producers and pursue geopolitical objectives. For U.S. oil producers it’s a win-win who are already benefiting from President Trump’s policies that have lowered inflation, increased revenue to the US government and has stepped up approvals for oil and gas, creating a very friendly environment for investment in US energy

It also shows that President Trump is committed to a more peaceful world and is doing everything in his power using the might of the US oil and gas sector and US economy to promote peace. And the move may already be paying off. Reports say that Polish Prime Minister Donald Tusk said Wednesday there are many signs the war in Ukraine may soon be at least suspended. That headline seems to have brought down energy prices here temporarily.

This comes in the aftermath of a major trade deal with European Union and even reports from the US ambassador to Canada that they are very hopeful that a trade deal between the United States and Canada will be reached.

Now we have two hurdles to an extremely bullish energy market, like  peace in Ukraine and the Federal Reserve decision where Federal Reserve Chairman Jerome Powell is going to come under the microscope. We have a surging diesel market with diesel supply coming right in dramatically, almost out of thin air in recent weeks to avert what was becoming a major US shortage in distillate supplies.

Refiners to the rescue stepped in just in time. Only three weeks ago, crack spreads had surged nearly to the highs seen after the attack on Iran’s nuclear facilities, driven by fears of supply shortages. Since then, we’ve witnessed an impressive turnaround—three consecutive weeks of massive gains in diesel inventories, which helped ease those shortages and reignite bullish sentiment in gasoline cracks as refiners concentrated efforts on rebuilding distillate stocks.

The American Petroleum Institute (API) reported that distillate supplies soared by a staggering 4.189 million barrels, following a previous week’s jump of over 3 million barrels. That’s an extraordinary boost to inventories over just two weeks and a powerful relief for the diesel market.

The API also reported that crude oil inventories were able to increase by 1.539 billion barrels which was pretty much in line with most expectations but we saw a drop in gasoline inventories at 1.739 million barrels which was on the bullish end of expectations. That drop in gasoline inventories caused a pop up in the gasoline crack spreads and really put in an impressive surge on the long gasoline short heating oil spread.

There is also a report that Russia is saying that they are concerned about a threat of a new strikes on Iran’s nuclear facilities. I would assume that they should be concerned especially if Iran will not let in weapon inspectors or if they continue to try to enrich uranium with the only logical assumption is that they want to get a nuclear weapon.

Looking at natural gas, prices are still searching for some stability as hotter temperatures are added to the forecast. EBW Analytics noted that, even though the September contract bounced up by 7.6¢ Tuesday after hitting key technical support, there are still quite a few challenges in the near term. For example, during the hottest week of summer, Henry Hub spot prices averaged $3.08, but cooling demand is already dropping off fast, production could nudge higher, and storage surpluses might even set new records.

While a relief rally could happen, the fundamentals aren’t giving us strong bullish signals right now. With plenty of gas in storage and likely weakness ahead in the spot market, it looks like the bears might stay in control for a bit longer. There’s even a chance we could see prices test sub-$3.00/MMBtu in the near future.

That said, the seasonal outlook suggests that natural gas may actually be a bit oversold at the moment. There could be more potential for prices to move up as we head into fall, especially if rising LNG demand helps work through those storage surpluses. So, while things are a bit tough now, there’s reason to be optimistic for a turnaround down the road!

Weather of course is going to be key as well. Fox Weather is reporting that Tuesday has been one of the worst days of a dangerous heat wave that is producing life-threatening conditions for those without access to cooling and hydration. Nearly 160 million people across more than 25 states are under either an Extreme Heat Warning or Heat Advisory, from Florida to New England, and west through the Midwest and Mississippi Valley, even stretching to parts of northeastern Texas. Keeping those air conditioners humming.

Make sure you download the Fox Weather app to keep up with the latest developments on the weather and storms affecting natural gas and other markets. Also stay tuned to the Fox Business Network because they’re invested in you.

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