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 OPIS. Denton, thanks for joining me.

DENTON CINQUEGRANA: Hi, Laura. How are you?

SANICOLA: So let’s talk oil.

Tariffs on India are officially in effect, and you would think that this would be having a bigger impact on oil markets. Can you explain to me if markets are moving at all and, if not, why?

CINQUEGRANA: Yeah. For much of August, WTI and was in a range of about, yeah, sixty one to sixty five call, maybe a little bit more than that sixty six or so. We’re just at the top end of that range and about three, four dollars to that for Brent.

I think what’s happening here is, you know, there’s OPEC barrels coming back to the market, but you also have India perhaps, you know, settling out a little bit of an olive branch and looking for alternative sources, other than Russia. Because if yes. The tariffs is one thing, but if the Trump administration decides on, say, sanctions against India, that could that could change the dynamic, obviously. But it doesn’t look like the tariffs are having too big of an impact on on the price of oil today, especially as we’re coming out of the summer driving season. Also, the Middle East is not gonna be using as much oil to burn for cooling purposes. So demand should start to trickle lower, and you should and you also have refinery turnarounds coming up in the fall season.

So, demand and supply should kind of flip flop where there’s more supply than demand, and that’s why you’re why you saw some fourth quarter estimates of Brent in the in the low sixties versus the sixty seven, sixty eight where it is right now.

SANICOLA: And speaking of refining, paint me a picture of what’s going on in California. They’ve, it’s, one of the biggest oil consuming states in the country, and, a number of refineries have already closed in the region, and a few more, I think, are set to close this year.

What’s it looking like in that region?

CINQUEGRANA: Yeah. So Phillips sixty six is planning on closing its Wilmington Refinery in Southern California. Valero has plans to close its Benicia Refinery, towards the end of the first quarter, beginning of second quarter of next year. So the upcoming one is Phillips sixty six at Wilmington, Southern California, Los Angeles area.

You know, it takes time to shut down a refinery safely, particularly for the community at a whole and the workers there as well. You gotta consider that.

So it you know, it’s probably gonna get started within the next week or so. The the timeline originally given was about October first.

So it does take time to shut down a refinery safely and sadly. So, that process getting started within the next week or so is probably not much of a surprise, But, with a pretty heavy turnaround slate in Southern California or in California in general, gasoline might get a little tight and RVP, which means the transition from winter grade to get summer grade gasoline and vice versa as we go into the fall. California is the last to go. They don’t go until the end of October, so there could be, and again, emphasize could be, some real issues as you get towards that tail end of the, low RVP summer season.

SANICOLA: Alright. Thanks for breaking that down, Denton, and thanks everyone for joining us. We’ll see you next week.