Are Gas Prices Finally Coming Down?
As the summer road trip season approaches, many Americans are eagerly awaiting some relief at the pump. But are gas prices where they need to be? According to oil and gas industry expert John Calce of America First Refining, the answer is no – but they’re on the right track.
“We’ve seen oil prices come down from a high end, according to the West Texas Intermediate (WTI) crude of $100, teens range to this morning around $87 ,” Calce explained. That’s a significant drop, and it’s mainly due to the hope for peace in the Middle East. However, he notes that prices also tend to creep up around Memorial Day due to the switch to a different blend of gasoline that’s more suitable for warmer temperatures.
Regarding oil producers, Calce says you can still expect aggressive moves. “A higher price environment enables especially US producers to be a bit more aggressive. They can dedicate more capital. They’re making more money, so they can dedicate more capital to drilling more wells also what you’re seeing with the higher prices.”
Calce’s expertise lies in the upstream space, where he’s spent decades drilling and working with shale oil. He’s now involved in building the first new US oil refinery in over 50 years, a project that’s been years in the making.
The US is producing a surplus of light oil, which is driving the need for more refining capacity. Calce’s company, America First Refining, is working to address this issue by building a new refinery that will process 60 million barrels a year of US crude into 60 million barrels a year of refined product. This will not only reduce the country’s reliance on imported fuel but also increase the overall amount of fuel available in the US.
Calce credits the Trump administration with creating an environment that encouraged investment and partnership with the US. “President Trump brought some sanity back to the rules around gasoline standards and emission standards,” he said. “He created an environment where people wanted to invest in the US for the long term, not just for a quick return.”
Listen to the full conversation on the Hammer and Nigel show below:
